Jeff Sutton’s Wharton Properties refinanced its Prada property on Fifth Avenue with an eye toward returning to the debt market relatively soon when rates may be lower.
German lender Aareal Capital Corporation provided Wharton with a $260 million loan for the property at 724 Fifth Avenue.
The new debt has a term of two years, which avoids locking Wharton into a long-term loan while rates are high.
A representative for Wharton declined to comment and a spokesperson for Aareal did not immediately respond to an inquiry.
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Aareal is deeply familiar with Wharton’s 65,000-square-foot property between 56th and 57th streets, having lent on it several times. The new debt refinances a $235 million loan it provided Wharton in 2021. Aareal also issued a $235 million loan against the property in 2017.
Prada has a long-term lease on the retail portion of the building, according to a source.
Sutton’s company acquired the 12-story building for $223 million in 2012 through a joint venture with SL Green Realty and Stonehenge Partners. Wharton bought out SL Green’s interest in 2018.
Elsewhere on Fifth Avenue, Wharton is trying to stave off foreclosure on the building at 717 Fifth Avenue, where retailers Dolce & Gabbana and Armani are tenants.
New York Life Insurance Company filed to foreclose in August, claiming Wharton and SL Green defaulted on a $300 million loan. A spokesperson for the property said at the time that the borrowers were working with the lenders on an extension. The case is ongoing.