Bank consortium provides $ 1.3 billion CMBS refinancing on Manhattan’s Grace Building – Commercial Observer
Bank of America, JPMorgan Chase, Swiss credit and German Bank combined to create $ 1.25 billion in debt with a joint venture led by Brookfield Real Estate Partners and The Swig Company to refinance the Grace Building, an iconic, curved 49-story office building that borders Bryant Park in Midtown Manhattan, according to the rating agency’s analysis of the transaction.
The 10-year single interest rate loan pays interest at a fixed rate of 2.75%, according to analysis by Kroll Bond Rating Agency (KBRA). It is repaying $ 900 million of existing commercial mortgage-backed securities (CMBS) debt that was provided by Deutsche Bank in 2014.
Bank of America and JPMorgan Chase each took a third of the loan amount, while Credit Suisse and Deutsche Bank each took 20% of the total, according to KBRA.
The borrower was able to recover approximately $ 320 million in equity as part of the transaction, through KBRA.
Of the total of $ 1.25 billion, $ 750 million is securitized in the GRACE 2020-GRCE Single asset, single borrower CMBS transaction (SASB), by KBRA. Overall, a portion of $ 883 million of the entire loan is spread over 20 senior A pari-passu notes, while the remaining $ 367 million is spread among four subordinated B notes. This CMBS SASB consists of four of the Senior A Notes, for a total of $ 383 million, and the other four Subordinated Rank B Notes. The remaining $ 500 million not included in this securitization is distributed among 16 pari-passu A notes which will be included in future CMBS transactions.
Built in 1974 and designed by Skidmore, Owings & Merrill, the approximately 1.6 million square foot tower – also known as the WR Grace Building – borders Bryant Park along West 42nd Street in the heart of Midtown. The Class A office is known for its curved vertical facade and located at the 1114 Avenue of the Americas – between West 42nd and West 43rd Streets – a few blocks from both Grand Central Terminal and the Times Square-The junction of the metro at 42nd street.
It includes 1.5 million square feet of office space, just under 31,000 square feet of retail, nearly 16,000 square feet of storage space, and there is also a parking garage of 65,000 square feet and 188 spaces under assets, according to KBRA analysis.
Brookfield purchased an interest in the property in 2006, a transaction that was part of its $ 8.9 billion acquisition from the owner of the office Trizec Properties.
According to KBRA, the owners of the joint venture have injected more than $ 160 million into the property for various improvements such as a lobby renovation, a “reconfiguration” of its 30,000 square foot outdoor plaza and for general tenant improvements. and rental expenses.
The Grace building is nearly 95 percent occupied by a variety of 38 tenants, according to the KBRA analysis conducted last month. The tenant who had leased the most space in the asset was a global adware company The trade office, which occupies nearly 15 percent of the rental area of the property. Several other of its biggest tenants include a Boston-based management consulting firm Bain & Company Inc., which is one of the largest in the world of its kind; Bank of America; venture capital firm Insight Partners; and the Discount Bank of Israel of New York. Its commercial tenants include Gabriel Kreuther, Joe and the juice, Steakhouse STK and Soft green, which are all open and have been operating under the appropriate COVID protocols since last month.
Bank of America is using the Grace Building as one of a few nearby Manhattan properties to assemble what is essentially a campus for its employees, according to KBRA. The bank is an anchor nearby A Bryant Park and took all of the 386,000 square feet to 1100 Avenue of the Americas.