RFR Secures $1.1B Recapitalization of Seagram Building

RFR, which in May negotiated an extension on a mortgage coming due on the Seagram Building, has secured a $1.1B recapitalization for the Park Avenue landmark.

The new financial package replaces a $789M senior CMBS loan backed by the tower at 375 Park Avenue in Midtown. The deal also includes about $350M in new equity from JVP Management, a mezzanine lender on the building, according to a report in Commercial Observer.

In February, RFR tapped Eastdil Secured to arrange a financial package that could retire the outstanding debt on the 38-story Seagram Building. In May, RFR received a one-year extension on the loan, with an extra 12-month option.

The loan on 375 Park Avenue was one of the two largest CMBS loans backed by Manhattan office buildings (both Park Avenue trophies that ended up on Trepp’s watch list) which successfully negotiated extended financial packages.

Tishman Speyer secured a one-year extension, with a one-year extension option, for a $485M CMBS loan backed by 300 Park Avenue, a 26-story building dating to 1955. The 10-year loan was originated by German American Capital Corp. in 2013 at a fixed rate of 4.41% when the office property was valued at $1B, Trepp reported.

The loan went to special servicing earlier this year. Tishman Speyer said it requested the transfer to special servicing, citing a “credit market dislocation.” The company said that it expected to work out an extension in advance of the loan’s due date in August.

Green Loan Services, an arm of SL Green, was the special servicer that negotiated the extension. “Our ability to secure a two-year loan extension is a testament to the market’s faith in 300 Park Avenue and Tishman Speyer as a sponsor,” said Randall Rothschild, Tishman Speyer’s Global Head of Debt, in a statement.

Tishman Speyer said the building is 97% leased, including 195K SF of leases, renewals and expansions during the past two years.

Like other aging office towers in Midtown, the Seagram Building has had to cope with the flight to quality. The tower, which opened in 1958, lost one of its largest tenants. In 2020, Wells Fargo, which had occupied 250K SF at 375 Park Avenue since 2004, moved into new space at 30 Hudson Yards.

RFR, which was able to recoup and maintain occupancy at the landmark 860K SF tower, invested $25M into upgrades on the building, including converting an underground parking area into a 35K SF shared amenity space.

RFR Realty acquired the Seagram Building in 2000 for $380M, or $540 per SF. Deutsche Bank and Citibank refinanced debt on the tower in 2013.

In 1989, the New York City Landmarks Preservation Commission designated the Seagram Building’s exterior, lobby, and The Four Seasons Restaurant as official city landmarks. The building was added to the National Register of Historic Places in 2006.