Microsoft’s new landlord in Manhattan’s Flatiron District has landed a $170 million mortgage.
Bromley Companies will use the loan proceeds to replace the existing financing for 122 Fifth Avenue, and fund the historic building’s ongoing makeover and tenant improvements, according to Walker & Dunlop.
The firm’s team was led by Aaron Appel and Jonathan Schwartz in arranging the loan from real estate finance and investment management firm PCCP.
Built in 1900, the 10-story building between West 17th and 18th streets has been owned by Bromley since 1979. In 1987, Barnes & Noble moved its headquarters to the 300,000-square-foot building, where it has remained for more than three decades.
The bookseller was acquired by hedge fund Elliott Management Corp in 2019. After the new owner opted not to renew the headquarters’ lease, the landlord commenced with a major renovation project to upgrade the entire building, including the addition of modern amenities and an 18,700-square-foot roof deck.
Bromley’s strategy to attract new tenants bore fruit. In late October, Microsoft — despite postponing its return-to-office plan indefinitely — signed a long-term lease for 150,000-square-foot across the sixth to 10th floors of the building.
In the wake of the pandemic, Manhattan’s office landlords with expiring leases turned to investing tens of millions of dollars in their properties throughout this year to attract well-heeled tenants who have plenty of options to choose from.
The borough’s office market is finally climbing out of the pandemic lows in recent months, but its availability rate remained near-record-high at 16.9 percent in November, according to Colliers.