Office valuations slashed in Midtown and FiDi: NYC’s top loans report

A trio of Manhattan office buildings faced a reckoning in June as refinancings indicated substantially lower valuations than pre-pandemic for the big commercial properties. 

Brookfield’s 1 Liberty Plaza landed a $750 million refinance loan after the value of the office tower had fallen by a third, to $1 billion, last year. 

Debt at 640 and 650 Fifth Avenue, office buildings that total more than 600,000 square feet, was reduced to $300 million from $500 million, also implying a substantial decline in asset values.

Multifamily fared better, especially in Brooklyn, with large loans provided by traditional and non-traditional lenders in Downtown Brooklyn, Greenpoint, Gowanus and Manhattan’s Upper East Side.  

Two hotels were also refinanced: the TWA Hotel at the JFK airport and the Mark Hotel on the Upper East Side. Here are more details of the 10 biggest real estate loans, five in Manhattan and five in the outer boroughs, recorded in June. 

Buyback dividend | $750 million | Financial District

Morgan Stanley gave a lifeline to 1 Liberty Plaza, a 2.3-million-square foot office tower in the Financial District, with a $750 million refinance loan to Brookfield Properties, which bought the minority interest in the property last year from Blackstone Group in a deal that valued the 54-story building at $1 billion, a sharp drop from a $1.5 billion valuation in 2018, when Blackstone bought the minority interest from Brookfield. The building was rumored to have collapsed following 9/11, but only its facade was damaged.

Bonanza for Bistricer | $330 million | Greenpoint, Brooklyn

JPMorgan Chase refinanced a three-building multifamily complex with 766 units at 77 Commercial Street, on the northern edge of the Greenpoint waterfront, with a $330 million senior loan to David Bistricer’s Clipper Equities as part of a $430 million financing package that retires a $386 million construction loan issued by Bank of China and SL Green just weeks into the pandemic. Some 230 units were set aside for households earning 40 to 125 percent of the area median income, Yimby reported. Market-rate one-bedrooms are listed from $3,800 to $4,000 per month.

On the Mark | $300 million | Upper East Side

Goldman Sachs provided a $300 million commercial mortgage-backed securities loan that made up the bulk of a $335 million refi of the Alexico Group’s luxury Mark Hotel at 25 East 77th Street. The remaining $35 million is mezzanine financing held outside of the CMBS trust. Alexico last refinanced the 153-key property in 2022, also leaning on the CMBS market then. That debt was originally scheduled to mature last month, but the maturity date had been extended three years.

Debt reduction | $300 million | Midtown

Morgan Stanley refinanced two office buildings, 640 and 650 Fifth Avenue in Midtown, with a $300 million loan to a subsidiary of Vornado Realty Trust. The loan is collateralized by a fee interest in 640 Fifth Avenue and leasehold interest in 650 Fifth Avenue, which had been seized by the Department of Justice before the seizure was overturned in 2019. Vornado granted Morgan Stanley the power of sale as a condition of the loan, meaning the lender can pursue a nonjudicial foreclosure to recoup its loan, which replaced $500 million in debt issued by Bank of China in 2019. Nike’s New York flagship store is a retail tenant at 650 Fifth Avenue.

Runway refi | $290 million | Jamaica Bay, Queens

Barclays provided a $290 million loan to MCR Development for its TWA Hotel at John F. Kennedy International Airport. The financing replaces a $270 million loan from Bank of America. The hotel at the landmarked Eero Saarinen-designed terminal opened in 2019 after a roughly $265 million renovation. The 512-room hotel has a rooftop infinity pool, curling rink and a cocktail lounge inside a 1958 Constellation airplane.

Canalside capital  | $286 million | Gowanus, Brooklyn

G4 Capital provided a $286 million construction loan to Rabsky Group for its 604-unit rental project at 313 Bond Street. Rabsky, led by Simon Dushinsky, will use the loan to build its 567,000-square-foot rental complex next to the Gowanus Canal. Dushinsky is one of many developers who have capitalized on a 2021 rezoning in the formerly downtrodden, industrial neighborhood to build apartments.

East Side story | $270 million | Upper East Side

BDT & MSD Partners provided a $270 million loan package to Jeffrey Levine’s Douglaston Development for a big development project on the Upper East Side. Douglaston bought the 90-unit rental property at 1450 Third Avenue for $114.5 million. The loan package includes $201 million in construction debt and $69 million in acquisition loan, according to property records. The property, which is also known as 170 East 83rd Street, covers the full western blockfront between East 82nd and East 83rd streets.

Refi therapy  | $150 million | East Harlem

Nomura Holdings lent $150 million to the New York Proton Center for the proton therapy center at 225 East 126th Street. The financing replaced a $240 million loan from JPMorgan Chase. The specialty medical building was created through a partnership between Memorial Sloan Kettering Cancer Center, Montefiore Health System, and Mount Sinai Health System. It opened in August 2019.

Avery Haul  | $140 million | Downtown Brooklyn

KKR provided a $140 million loan to Avery Hall for its luxury rental building One Boerum. KKR affiliate Forethought Life Insurance Company provided the loan for the 22-story luxury rental building above the Borough Hall subway station in Downtown Brooklyn. The loan replaces debt from Canadian asset manager QuadReal. The 250,000 square-foot building was originally set to be condos but the developers pivoted to luxury rentals before it was completed. 

Fleet feat | $100 million | Downtown Brooklyn

Affinius Capital extended a $100 million senior loan to the Jay Group, as part of a $160 million finance package, for a 21-story multifamily building at 101 Fleet Place in Downtown Brooklyn. The loan will be used to complete construction and lease the 294-unit building. The developer bought the property in 2021 for about $40 million.

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