JV Lands $150M Loan for NYC's Textile Building Makeover

A partnership between Tribeca Investment Group, Meadow Partners and PGIM Real Estate has secured a $150M financing package for the renovation of 295 Fifth Ave.

Deutsche Pfandbriefbank provided the loan in a transaction arranged by Newmark. The Newmark team was led by Vice Chairmen Dustin Stolly and Jordan Roeschlaub, together with Senior Managing Directors Christopher Kramer and Nick Scribani, Director Ben Kroll and Finance Analyst Holden Witkoff.

The partners acquired the century-old landmark in Manhattan’s Midtown South neighborhood in 2019 in a $375M acquisition that included a 99-year ground lease.

The loan will help pay for $350M in capital improvements to the 17-story, 700K SF office building, which was built in 1920 and known as the Textile Building.

The renovation, which began in 2021 under the design of STUDIOS Architecture, included 44K floorplates and 12- to 18-foot ceilings in what the designer is calling pandemic-inspired office design changes that will make the building competitive with newer buildings attracting tenants in a flight to quality.

The final stages of the renovation include a new, two-story, 34K SF penthouse that is being built atop the existing structure, a new double-height lobby and new windows, elevators and HVAC systems.

For much of the 20th century, the Textile Building between East 30th and 31st Streets, was the address of choice for makers of sheets, towels and rugs. Designed to be showroom hub of the US textiles industry, the building has a shiny gold loom logo over the entrance.

The building was vacated in 2019 after the new owners announced plans to modernize it with the intention of drawing in tech players. According to a report in the NY Times, 78 textile firms that called the building home moved out, with about 30 of them relocating to surrounding neighborhoods.

Midtown Manhattan saw 4.62M SF of leasing activity in Q3—27% above the five-year quarterly average and a 40% surge YOY, according to the Alliance for Downtown New York’s market report.

“This is the second highest quarterly total since Q4 2019 and the second consecutive quarter with over 4M SF of leasing. Flight-to-quality continues to drive leasing in Midtown,” the Alliance report said, noting that the largest lease of the year was signed at 2 Manhattan West.

The Alliance report cautioned that the robust leasing activity comes as headwind storm clouds are brewing.

“Vacancy rates remained stubbornly high in all three Manhattan office markets, which were over 20% for the second quarter in a row [in Q3],” the market report said.