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New York

Blackstone refis Park Avenue Tower with $309M in CMBS debt, down 27 percent from 2019

Owner has boosted tenancy at Midtown office, in part by offering lease opt-outs

Blackstone Lands $309M Refi For Park Avenue Tower
65 East 55th Street and Blackstone's Stephen Schwarzman (Google Maps, Getty)

Blackstone scored a $308.5 million refinancing deal on Park Avenue Tower.

Morgan Stanley originated the loan and packaged it into commercial mortgage-backed securities to be sold to investors. The financing replaces a $425 million CMBS loan from 2019, also from Morgan Stanley.

The new CMBS loan on the 36-story building at 65 East 55th Street, a hub for financial services tenants, is 27 percent smaller than the last one. Either Blackstone is borrowing more from mezzanine lenders than it did in 2019 or the firm kicked in equity to repay the expiring debt — or both.

Blackstone declined to comment. The CMBS loan was first reported by PincusCo.

Blackstone’s $570 million refi in 2019 included the CMBS loan and mezzanine debt. The amount of mezzanine debt in this year’s refinancing could not be determined. Mezzanine loans attached to ownership entities rather than properties are not recorded in city records.

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Blackstone subsidiary EQ Office bought the 622,000-square-foot property in 2014 for $750 million. At the time it received a $560 million loan on the property, $425 million of which was securitized.

The firm put the building on the market in 2019 for more than $800 million but did not find a buyer. Covid’s arrival the next year triggered a surge in remote work, pummeling the office sector. 

Still, occupancy at the Midtown tower has improved. Availability has dropped to 14 percent from  23 percent since 2019, according to CoStar. In December, asset management firm Eagle Capital inked a 16,000-square-foot lease for the entire 26th floor, CoStar reported.

However, the occupancy gains have come at a cost: The landlord has given some tenants the option to downsize, Crain’s reported this month, citing information disclosed to potential CMBS investors.

Hedge fund PineBridge and 10 other tenants have been given the choice to opt out of a portion of their space before their leases expire, a concession likely offered to sustain tenancy at the building.

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BlackstoneManhattan Office MarketMidtownOffice LeasingPark AvenueRefinancing