A trio of Manhattan office buildings scored 10-figure CMBS deals in February, another sign of a post-pandemic recovery for trophy commercial properties.
The blockbuster refinancings come amid an overall surge in issuance of commercial mortgage-backed securities. CMBS issuances totaled $18.3 billion nationwide last month, more than double January’s total of $7.9 billion, according to KBRA. That’s up 196 percent year-over-year, and the bond ratings association predicted “no likely slowdown on the horizon.”
The CMBS market is often considered a bellwether for the overall lending market and the broader commercial real estate market.
Irvine Company’s famed MetLife Building landed the largest CMBS deal, a $1.5 billion loan issued by Bank of America and Wells Fargo.
And Aby Rosen’s RFR Holding got some good news for a change, scoring a $1.2 billion refinancing of the Seagram Building.
Ivanhoé Cambridge’s trophy office tower, 3 Bryant Park, grabbed another massive $1.1 billion CMBS loan.
“The volumes have been fantastic,” Trepp’s Stephen Buschbom said of bond issuance on The TreppWire podcast. “I’m looking ahead at what’s scheduled into April and we’re just a stone’s throw from hitting $35 billion.”
The Real Deal broke down February’s five largest loans in Manhattan and the top five in the outer boroughs:
New life for MetLife | $1.5B | Midtown
Bank of America and Wells Fargo originated a $1.5 billion CMBS loan for the Irvine Company’s famed MetLife Building. The loan carries an interest rate of 5.39 percent over 10 years, a sizable jump from the 3.6 percent interest rate Donald Bren’s firm previously faced. The debt-serving costs will double to approximately $100 million a year. The 58-story, 3 million-square-foot building is 94 percent occupied and generates $170 million in net operating income. Ownership, which included Tishman Speyer until it was bought out last year for an unknown price, has invested $180 million in the property dating back to the year before the pandemic.
Rosen refi | $1.2B | Midtown
Morgan Stanley, Citi Real Estate Funding and JPMorgan Chase originated a $1.2 billion CMBS loan to refinance RFR Holding’s Seagram Building at 375 Park Avenue. The four-year, fixed-rate loan will carry a 6.25 percent interest rate, nearly double the 3.53 percent rate on the existing debt, according to Morningstar Credit. The refinancing package retires $1.15 billion in existing debt, utilizing $24.6 million from existing reserves to complete the payment. The loan structure will fund significant reserves, including a $26 million escrow for contractual free rent and $21.3 million for outstanding landlord obligations. Newmark recently appraised the 38-story, 860,000-square-foot property at more than $1.8 billion. The trophy office tower boasts a 96 percent occupancy rate.
Bryant Park boon | $1.1B | Midtown
Wells Fargo, Bank of America and Bank of Montreal provided a $1.13 billion CMBS loan for Ivanhoé Cambridge’s trophy office tower, 3 Bryant Park. The loan for the 1.2-million-square-foot tower at 1095 Sixth Avenue — located between West 41st and 42nd streets — replaces a CMBS loan of the same amount. The fresh financing is an encouraging sign for the Canadian investor, which has almost $5 billion worth of loans set to mature in the next year. The real estate arm of Quebec’s $300 billion pension fund tore through U.S. cities over the past decade, paying top dollar to buy top-tier properties.
Park Avenue payday | $500M | Midtown
Citi Group and JPMorgan provided a $500 million loan to refinance Fisher Brothers’ 299 Park Avenue. The fresh financing replaces a $325 million loan from a group of lenders. The landlord recently spent $20 million on a capital improvement project at the 42-story, 1.2 million-square-foot tower, which is 95 percent leased. Capital One and UBS combine to take up 30 percent of the rentable square footage in the building and are in place through 2031. Lease expirations are minimal for the next few years.
Wall Street windfall | $275M | Financial District
Apollo Global Management provided a $275 million loan for Rockpoint and Brooksville Company’s residential tower at 63-67 Wall Street. The two buildings are converted offices with more than 800 total units. The partners purchased the adjacent buildings from DTH Capital and Metro Loft Management in 2016 for $421.5 million, utilizing a $280 million loan from Wells Fargo. Since then, ownership has renovated the properties, upgrading common areas and amenity spaces.
Logistics loot | $235M | Maspeth
New York Life Insurance Company provided a $235 million loan for RXR Realty and LBA Logistics’ vertical warehouse at 55-15 Grand Avenue in Maspeth, Queens. The fresh financing replaces a $316 million loan from JPMorgan Chase. The partners spent $72 million in January 2018 on parcels for the five-story warehouse and Amazon agreed to lease the space for its network of last-mile delivery warehouses.
Storage swag | $143M | Long Island City
Bank of Montreal provided a $143 million loan to Storage Deluxe for two industrial buildings on 21st and 22nd streets in Long Island City, Queens. The fresh financing replaces an $87 million CMBS loan. The properties at 41-45 21st Street and 41-54 22nd Street span a total of 277,601 square feet.
Rabsky refi | $140M | Fort Greene
Madison Realty Capital provided a $140 million loan for Rabsky Group’s nearly-completed residential tower at 240 Willoughby Street. The secretive developer led by Simon Dushinsky is building a 30-story, 300-unit multifamily building near Fort Greene Park. It also plans to renovate an existing 21-story apartment project with 189 units. Rabsky secured a $72 million construction loan in 2022 from SCALE, the lending arm of Slate Property Group.
Flatbush funds | $98M | Park Slope, Prospect Heights
Derby Copeland Capital provided a $98 million loan to Ed and Michael Ostad for their purchase of a large portfolio of properties along Flatbush Avenue. The Ostads bought the 26-building portfolio of mixed-use properties from Brooklyn’s Pintchik family for $102.5 million.
Shelling out cash | $75M | Coney Island
Goldman Sachs provided a $74.8 million loan for Elie Fouerti’s multifamily development at 2971 Shell Road in Coney Island. Fouerti Realty and Rybak Development wrapped up construction last year on the eight-story, 189-unit rental building, according to New York YIMBY. The fresh financing replaced a $74.8 million construction loan from Popular Bank.
Correction: A previous version of this article misidentified the interest rate on the refinancing for Irvine Company’s MetLife Building.
