(To read more on the debt and equity markets, click here.)
NEW YORK CITY-SL Green Realty Corp. and the City Investment Fund LP have obtained a $390-million three-year loan on 485 Lexington Ave. The joint venture acquired the 921,000-sf midtown site from TIAA-CREF in July 2004 for $225 million. SL Green also completed a 10-year lease expansion and renewal agreement at 1372 Broadway.
Since the acquisition, the building has been repositioned and rebranded as "Grand Central Square", along with 750 Third Ave., its neighboring property which is owned 100% by SL Green. In October 2005, Citibank NA signed on for 296,756 sf at 485 Lexington. After that, St. Paul Travelers took 210,609 sf with and Fairchild Publications Inc. committed to 52,573 sf.
The loan bears interest at Libor plus 1.35% and can be extended for an additional two years. HSH Nordbank AG, New York Branch fully underwrote the amount. Sonnenblick Goldman acted as the exclusive financial advisors to the joint venture.
The initial funding of the loan was approximately $293 million which was used to repay the existing loan, return 100% of the partners invested capital and provide for a return on capital that exceeded the performance thresholds established with CIF. The balance of the loan will be used to fund the remaining renovations, lease up and tenant improvements for the building.
As a result of exceeding the performance thresholds established with CIF, SL Green's economic stake in the property will increase from 30% to 50%. SL Green will use its portion of the refinancing proceeds to repay its unsecured revolving credit facility and for future investments.
In the leasing transaction, Ross Stores Inc. will expand its presence from 130,075 sf to 165,183 sf at 1372 Broadway. Ross will occupy the space for executive and buying offices. Space in the site is advertised at $38 per sf. Located in the heart of Times Square South, on Broadway between 37th and 38th streets, the 21-story property, containing 534,000 of rentable sf, was fully renovated by SL Green in 1999 and features a new lobby with entrances on Broadway and 38th Street and new elevator cabs. The building houses tenants in fashion and other commercial industries. Other tenants include Ann Taylor, Inc. and Interlinks, Inc. Howard Simson and Charles Borrock of Cushman and Wakefield represented the tenant.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
