Taconic lands $125M refi for renovated Union Square office building

Ares, Criterion provided new debt for the 140k-sf, century-old landmarked property

817 Broadway and Taconic co-CEOs Charles Bendit and Paul Pariser (Taconic)
817 Broadway and Taconic co-CEOs Charles Bendit and Paul Pariser (Taconic)

Located catty-corner to the iconic Strand bookstore just south of Union Square, the 126-year-old office building at 817 Broadway has undergone a thorough renovation since Taconic Partners, Nuveen and Squire acquired it in 2016.

The landlords kicked off a new phase in their plans for the property this month, when Ares Commercial Real Estate and Criterion Real Estate Capital provided a $125 million refinancing for the 14-story, 140,000-square-foot building. The funds will provide capital for tenant fit-out work and leasing costs at the building and pay off a $102 million acquisition loan provided by Mesa West in 2016.

Criterion managing director Adam Falk

Criterion managing director Adam Falk (LinkedIn)

“817 Broadway is an important asset in our office portfolio,” said Chris Balestra, Taconic’s president and chief investment officer, in a statement. “This shows there is ample debt capital for this segment of the office market where we have seen the quickest recovery in leasing activity, post-pandemic.”

Ares provided $90 million in senior debt, which was recorded in city property records on Monday and first reported by PincusCo. Criterion provided the $35 million mezzanine piece.

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Constructed in 1895, the building previously featured water-powered elevators and coal-fired boilers, which were removed in the recent renovation. Steel beams on the upper floors, as well as the limestone and terracotta facade, were kept intact.

In 2019, the building was named a city landmark along with six other nearby properties — including, controversially, the Strand.

Tenants at the building include private equity firm SDC Capital Partners, which signed a 9,980-square-foot lease for the entire 10th floor in 2019, and retail advertising firm Barrows, which took up a similarly-sized space on the third floor in 2020. Asking rents in the building start in the high-$90 range.

Taconic and Nuveen are frequent partners on New York City real estate projects. This March, they landed a $600 million recapitalization for 125 West End Avenue, an Upper West Side office building, which they are transforming into a life-sciences hub.