Paramount Group has new financing in place for its vacant Financial District office tower, which the owner is revamping in the hope of reeling in tenants.
The real estate investment trust led by Albert Behler scored a $575 million mortgage for 60 Wall Street, Crain’s reported. Behler announced the financing during a conference call this week, saying the property will “redefine the standard of redeveloped assets in the Financial District.”
Behler didn’t disclose the originator of the refinancing package on the call, but public records point to Germany’s Aareal Capital as the lender in the deal; Aareal wrote the previous loan on the property.
Paramount is being saddled with significantly higher interest rates for the five-year mortgage, which is split into a couple of pieces.
A $259 million portion has a 12 percent interest rate and is a payment-in-kind loan, which means any unpaid monthly obligation gets added to the balance of the loan, potentially permitting the borrower to add mounds of untenable debt to balance sheets.
The remaining $326 million portion of the mortgage has a 7.8 percent floating interest rate, mirroring the rate Paramount and its partner, the Singapore sovereign wealth fund, defaulted on a year ago.
A $250 million redevelopment of the property has been in the works for three years. The process of revamping the 47-story, 1.6-million-square-foot property was spurred by the departure of Deutsche Bank, which left for the Time Warner Center in 2022, leaving 60 Wall Street empty.
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Among the changes coming to 60 Wall Street are the addition of a glass facade for the lower levels and the installation of a grand staircase in the lobby, which provides access to the subway station below. Paramount also plans to gut the lobby, a privately-owned space where the public gathers below trees and marble columns.
Elsewhere, Paramount recently inked Citizens Bank to a 74,000-square-foot lease at 1301 Sixth Avenue in Midtown. The REIT’s prominent office holdings are primarily in New York and San Francisco.