Boston Properties nabs $1B loan at 601 Lex

Midtown office property's $620M in mortgage debt was set to mature in April 2022

New York /
Dec.December 15, 2021 10:30 AM

Owen Thomas, chief executive officer, Boston Properties, along with 601 Lexington Avenue (Boston Properties, LoopNet, iStock/Illustration by Steven Dilakian for The Real Deal)

Nearly six months after predicting the threat of remote work is “overstated,” Boston Properties secured a boost in the form of a $1 billion loan for its substantial office building at 601 Lexington Avenue.

The developer secured the refinancing package from Wells Fargo, Deutsche Bank, Morgan Stanley and Citigroup, the Commercial Observer reported. According to Moody’s Investors Service, $426.7 million of the debt will be securitized in a single-asset, single-borrower CMBS deal.

The 10-year, fixed-rate first-lien mortgage is being backed by the fee simple and leasehold interests in the office condominiums and the six-story office and retail atrium within the 59-story building, the Observer reported.

Boston Properties is partnering with Norges Bank Investment Management, which bought a 45 percent interest in the building in 2014 for $1.5 billion, along with interests in two of the company’s buildings in Massachusetts’ capital city.

Boston Properties was faced with the imminent maturation of $620 million in existing mortgage debt before the latest refinancing, as the debt was set to mature in April. Boston Properties CFO Michael LaBelle said in the company’s third quarter earnings call it was the only significant debt maturity coming for 18 months, according to the Observer.

The 1.8 million-square-foot office building was constructed in 1977 and became the youngest landmarked building in the city in 2016. The building has an average occupancy of about 98 percent since 2010 and is 84 percent leased to prominent law firms, including Kirkland & Ellis.

Boston Properties recently completed a $283 million renovation of the building’s atrium that incorporated additional restaurant space, as well as a ground-level entrance and separate lobby at East 53rd Street. The developer has also upgraded other entryways and office space, in addition to opening a 17-restaurant food hall in September.

[CO] — Holden Walter-Warner





    Related Articles

    arrow_forward_ios
    R-L: Willow's Kevin Danehy, Era Ventures' Clelia Warburg Peters, Fifth Wall's Brad Greiwe and The Real Deal's Hiten Samtani (Photo by Paul Dilakian)
    Real estate tech is coming for your business
    Real estate tech is coming for your business
    Industrious CEO Jamie Hodari and CBRE chief financial and investment officer Emma Giamartino (LinkedIn, CBRE)
    CBRE doubles down on flex-office provider Industrious
    CBRE doubles down on flex-office provider Industrious
    New York skyline
    Rising interest rates will dampen city’s investment sales market this year
    Rising interest rates will dampen city’s investment sales market this year
    135 West 50th Street in Manhattan in NYC with George Comfort & Sons CEO Peter Duncan (Google Maps, George Comfort & Sons Inc.)
    George Comfort & Sons inks 62K sf tenant in Midtown
    George Comfort & Sons inks 62K sf tenant in Midtown
    Schenectady City Council president Marion Porterfield (Facebook, iStock)
    Destructive tenants driving upstate landlords to despair
    Destructive tenants driving upstate landlords to despair
    ABS Partners Real Estate founder Earle Altman and 270 Madison Avenue (ABS Partners, LoopNet, iStock)
    NY Public Library leases 41k sf for Midtown offices
    NY Public Library leases 41k sf for Midtown offices
    Legion Investment Group's Victor Sigoura and 26 East 84th Street (Getty Images, Google Maps, iStock)
    Old-guard landlords cash out in Manhattan, Bronx multifamily deals
    Old-guard landlords cash out in Manhattan, Bronx multifamily deals
    Ben Shaoul and 1457 North Main Street (Getty, LoopNet)
    Ben Shaoul plans 376-unit complex near L.A.’s Chinatown
    Ben Shaoul plans 376-unit complex near L.A.’s Chinatown
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...