Loan rangers: Office owners trim debt as refis roll in

Blackstone, SL Green reined in borrowing at Midtown office towers

NYC Office Landlords Trimmed Borrowing in March
Blackstone's Stephen Schwarzman, Carlyle Group's Harvey Schwartz, Gotham Organization's Joel Picket and SL Green’s Marc Holliday with 65 East 55th Street, 200 West 67th Street, and 10 East 53rd Street (Getty, Carlyle Group, Gotham Properties, Google Maps)

With office valuations falling and interest rates not, some of New York City’s largest loans in March went to refinancing the once-unstoppable office asset at lower levels of debt.

Blackstone replaced a $425 million loan from 2019 with new debt of just over $300 million. Meanwhile, the city’s largest office landlord, SL Green, borrowed 7 percent less against its Midtown office tower at 10 East 53rd Street in order to roll over its debt.

Other large loans went to refinance multifamily and hotel buildings. Big construction loans were recorded in Crown Heights, Flatbush and the Upper West Side.

Here are more details of the five largest real estate loans recorded in Manhattan in March, plus the five biggest of the outer boroughs.

Towering refi | $308M | Midtown

Blackstone scored a $308.5 million refinancing 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.

Fresh Aire | $216M | Upper West Side

The Gotham Organization and the Carlyle Group landed a $216 million bridge loan associated with their acquisition of The Aire, a luxury multifamily tower at 200 West 67th Street. The loan, from MF1 Capital, was brought to the market shortly after Gotham and Carlyle purchased the property from A&R Kalimian Realty for $265 million.

Same lender, smaller loan | $205M | Midtown

SL Green Realty scored a $205 million refi of a Midtown office tower, but borrowed 7 percent less against the property than when it refinanced the building four years ago.

The Marc Holliday-led REIT landed the loan from Wells Fargo for 10 East 53rd Street. The debt replaced a $220 million, five-year, interest-only loan provided by the same lender in 2020. Wells Fargo had issued $180 million in financing on the 37-story, 385,000-square-foot property in 2017.

The mixed-use project is planned for nine stories and 328 apartments. Amenities will include a yoga room, karaoke room and library — all good stress-relieving options for office REIT executives.

Refi with Moxy | $178M | Chelsea

David Lichtenstein’s Lightstone Group refinanced the Moxy Chelsea hotel at 105 West 28th Street for $177.8 million. An undisclosed lender provided the loan through the Israel-based entity Reznik Paz Nevo Trusts Ltd. It replaced a $124 million loan originated by Loancore Capital. Lightstone purchased the property in 2014 for $11.6 million. The firm refinanced its Moxy hotel on the Lower East Side in February.

Story ARC | $168M | Long Island City, Queens

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Lightstone also refinanced ARC, a 428-unit luxury multifamily property at 30-02 39th Avenue in Long Island City. JLL provided the $168 million loan, which is below the previous $187 million in debt Lichtenstein secured from Citibank.

Lightstone bought the former parking garage site in January 2016 for $23 million and broke ground later that year. The project landed a $75 million loan from Canadian Imperial Bank of Commerce that year.

Under the wire | $135M | Crown Heights, Brooklyn

Hudson Companies scored $135 million in construction financing from Santander and an affiliate of Related Companies in time to beat the deadline for a valuable tax abatement. Santander provided $85 million for a mixed-use project in Crown Heights at 975 Nostrand Avenue, while Related Fund Management provided the remaining $50 million.

The plan is for nine stories and 328 apartments. Construction began in August 2022 and is expected to wrap by next fall, ahead of the June 2026 deadline for 421a. After the loan closed, state lawmakers extended the deadline to 2031.

Going up | $129M | Upper West Side

Naftali Group snagged a $129 million construction loan for a condominium project on the Upper West Side. Miki Naftali’s firm closed on the loan from Israel’s Bank Hapoalim for 215 West 84th Street, where it plans a 230,000-square-foot building with 45 new units.

The project, across the street from the AMC theater, will yield 18 stories of residences on the northeast corner of West 84th Street and Broadway, and a seven-story building that extends eastward along West 84th.

Air mail | $114M | New Lots, East Elmhurst

A Houston-based life insurer with Blackstone Real Estate Special Situations Advisors refinanced a 750,000-square-foot industrial portfolio with $114 million. The longtime owner of the properties is GTJ REIT.

The six-property portfolio consists mainly of parking lots for industrial fleets and is located in New Lots, Brooklyn, near LaGuardia Airport, and East Elmhurst, Queens, near JFK. The funds include a new $76 million gap loan.

Bistricer’s bonanza I | $140M | Flatbush

Scale Lending, the debt arm of Slate Property Group, financed the construction of a 350-unit multifamily building 2366 Bedford Avenue in Brooklyn with $140 million. The site is part of Clipper Equity’s four-building project near the vacant Sears Roebuck & Co. department store building at the corner of Bedford Avenue and Beverly Road. David Bistricer is the principal of Clipper Equity.

Bistricer’s bonanza II | $105M | Flatbush

Valley National Bank financed the construction of a 300-unit multifamily building at 2201 Beverly Road in Flatbush with $140 million. The property is part of Clipper Equity’s Bedford Square development, which has received about $340 million in construction financing, including a $95 million loan from BHI (the U.S. division of Bank Hapoalim) in April at 2359 Bedford Avenue, where Clipper plans a 130-unit multifamily building. 

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