![From left: Rob Speyer, Steve Roth (top), Jeff Gural (bottom), and Aby Rosen (Getty, Ken OHYAMA from FUNABASHI, Japan, CC BY-SA 2.0 - via Wikimedia Commons)](https://static.therealdeal.com/wp-content/uploads/2023/06/ft_NY_Extend-N-Pretend.jpg)
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JEMB puts up “significant” cash to extend $225M loan on Herald Square H&M building
Landlord looks to fill large vacancy after ASA College shut down
![JEMB Extends Herald Center Loan](https://static.therealdeal.com/wp-content/uploads/2024/01/main_NY_JEMB-Herald-Square-HM-1400x875.png)
Owners of the LED-bedecked H&M property in New York City’s Herald Square bought themselves three more years on their $255 million mortgage.
Morris Bailey and Joseph Jerome’s JEMB Realty negotiated an extension on the Herald Center’s CMBS loan that was set to mature this month, a person familiar with the agreement told The Real Deal.
JEMB put up a “significant equity infusion” in exchange for a 1-year extension with an option for another two 12-month extensions, which would bring the loan out to 2027, the person said.
A representative for JEMB declined to comment. Iron Hound Management negotiated the extension.
As high interest rates have made refinancings difficult to pull off, owners have faced basically two options: hand the keys back to their lenders, or pour extra cash into their properties.
Owners with well-performing buildings who see a light at the end of the tunnel, when rates eventually go down, have been choosing the latter.
When Aby Rosen extended the $1 billion loan on the Seagram Building last year, he agreed to pay down $55 million of the loan’s principal over the next two years. Tishman Speyer put more than $30 million into a reserve fund when it extended the $485 million mortgage on its 300 Park Avenue office building.
JEMB’s Herald Center at 1293 Broadway reported net income of $12 million through September last year with a debt-coverage ratio of 1.38 to 1. A ratio above 1 is considered healthy.
The majority of the cash flow comes from the lease with H&M, which occupies about 25 percent of the building’s 250,000 square feet. The property’s financials, however, have taken a hit due to the loss of a big tenant.
Last year the for-profit ASA College that had occupied 165,000 square feet of space on the floors above H&M shut down. A note from the loan’s special servicer said there is interest from others to lease some, if not all, of the vacated space. The building’s occupancy is at 65 percent.
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![From left: Rob Speyer, Steve Roth (top), Jeff Gural (bottom), and Aby Rosen (Getty, Ken OHYAMA from FUNABASHI, Japan, CC BY-SA 2.0 - via Wikimedia Commons)](https://static.therealdeal.com/wp-content/uploads/2023/06/ft_NY_Extend-N-Pretend.jpg)
![](https://static.therealdeal.com/wp-content/uploads/2013/03/Untitled-11-150x150.jpg)
![H&M Herald Center](https://static.therealdeal.com/wp-content/uploads/2015/05/HM-Herald-Center-ft-150x142.jpg)
JEMB purchased the property across the street from Macy’s out of bankruptcy in the 1980s. Then the home of the discount clothing store Daffy’s, the building was an eyesore with black tinted glass panels.
Bailey described the property as “a source of frustration to us for a long time.” In 2013 the owners announced a $50 million plan to overhaul the building and make it more attractive to retailers.
Two years later JEMB lured H&M away from a nearby property on the other side of Herald Square, signing the fast fashion shop to 65,000 square feet.
H&M wasn’t happy with the renovation JEMB did, though, and later that year filed a lawsuit claiming the landlord changed its plans and cheaped out on the facade. The two sides later agreed to discontinue the case.