Top October loans: Cash cows, big buys, foreclosure avoidance

New York /
Nov.November 22, 2021 07:00 AM

“Edge” observation deck at Hudson Yards, 51 West 52nd Street & 1177 Sixth Avenue (edgenyc.com, silversteinproperties.com, Wikipedia)

The 10 largest Manhattan real estate loans recorded in October totaled $2.1 billion — about double September’s total but short of August’s $3.2 billion waterline.

October’s loans included a cash-out refinance, acquisition loans for Black Rock in Midtown and Hudson Yards’ observation deck, and funding that helped the Chetrits escape foreclosure in Midtown East.

Here were the borough’s largest real estate loans in October:

1. CMBS cash cow | $450M

Larry Silverstein and a California pension fund will refinance 1177 Sixth Avenue with a $450 million CMBS loan, from which the owners will draw about $78 million in cash. The loan was led by Deutsche Bank affiliate DBR Investments and Wells Fargo and comes just months after Silverstein and CalSTRS bought out former partner UBS’s stake in the Midtown office skyscraper in a deal that valued the building at $860 million. The loan will retire $360 million in previously securitized debt.

2. Safe harbor | $420 million

Harbor Group International secured a $420 million senior loan from Deutsche Bank and Goldman Sachs to finance its $760 million purchase of 51 West 52nd Street from ViacomCBS. Known as Black Rock, the 1965 building was designed by Eero Saarinen and had never been sold before. Financing for the deal totaled $558 million in CMBS loans, including $138 million from Brookfield Real Estate Finance in the mezzanine position.

3. Loan with a view | $391 million

Private equity firm KKR secured $391 million from the Carlyle Group to purchase a majority stake in the observation deck at 30 Hudson Yards — the tallest outdoor deck in the Western hemisphere — for $509 million. KKR bought the space, called Edge, from the Related Companies. Tourist attractions have had a rough go: At the Empire State Building, which has relied on visitors to its observation center, drops in revenue have been steep.

4. Close shave | $220 million

Jacob Chetrit refinanced his half-empty office building at 850 Third Avenue in part with a $220 million senior loan from the private investment firm HPS Investment Partners. Chetrit fell behind on its $177 million mortgage and faced foreclosure after missing the loan’s maturity date, but the new funding from HPS totaling $320 million allowed him to pay off the loan. Chetrit Organization bought the 21-story Midtown East building for $422 million in 2019 from China’s debt-laden HNA Group, which was looking to shed assets.

5. Green on green | $201 million

Spear Street Capital landed $201 million from Bank of America for its purchase of 635-641 Sixth Avenue from SL Green Realty for $325 million. SL Green outfitted the building with a new lobby and elevators and a penthouse with rooftop event space in 2015. The 267,000-square-foot property was 94 percent leased in May. The largest tenant, software company Infor, occupies nearly half of the building and renewed its 90,000-square-foot lease this year.

6. Mystery buyer & Blackstone | $115 million

Blackstone Real Estate Debt Strategies financed an undisclosed buyer’s purchase of a hotel at 350 West 39th Street in the Garment District with a $115 million loan. The hotel belonged to mid-market hotel king Sam Chang and sold for $166 million. The identity of the buyer is shielded by a limited liability company. Chang has sold numerous hotels since the pandemic sapped the city of tourists and business travelers.

7. Burkle bucks | $97 million

Billionaire Ron Burkle’s Yucaipa Companies snapped up a $97 million bridge loan from iBorrow to buy the former headquarters of the American Stock Exchange at 86 Trinity Place in the Financial District for $155 million. Burkle is seeking a construction loan to renovate and operate the art deco building as a Soho House, a chain of private clubs Burkle partly owns, according to a statement from iBorrow.

8. Apollonian loan | $97 million

A&E Real Estate consolidated the debt on its newly acquired Sutton Place apartment building with a $97 million loan from Apollo Global Real Estate Management. The Real Deal reported in April that A&E bought the building from SL Green for $133.5 million; the contract closed in October, the Commercial Observer reported. SL Green marketed its 41 percent stake in the building along with the nearby 400 East 58th Street last year. A&E purchased the East 58th Street building for $62 million in September 2020.

9. Sayonara MUFG | $84 million

Apple Savings Bank agreed to lend $84 million to Rockefeller Center North at 1271 Sixth Avenue, replacing debt held by Japanese lender MUFG Bank. Insurance giant AIG gave the building a boost last year when it announced it would relocate its global headquarters there. MUFG, Japan’s largest lender, recently pulled back from retail banking in the U.S. in an $8 billion sale of MUFG Union Bank to Minneapolis-based U.S. Bancorp, Reuters reported.

10. Well, well, Wells | $75 million

Wells Fargo lent $75 million to Global Holdings Management Group for its ground-up, 24-story residential project at 1841 Broadway. Foundation work began at the site in September, Yimby reported. The loan replaces debt held by HSBC. Global Holdings filed plans for the new building in 2018. In the past it has backed condos developed by the Zeckendorf family, including at 15 Central Park West, 520 Park Avenue and 50 United Nations Plaza.





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