Empire State Realty Trust Gets $715M Credit Facility

Empire State Realty Trust has obtained a $715 million financing package, consisting of a $620 million revolving credit facility and a $95 million term loan facility.

Both have a maturity date set for March 2029. The revolving credit facility has two six-month extension periods at the option of the company, while the term loan facility includes two 12-month extension periods. The new credit facility is replacing the one ESRT received in 2021 and which has an initial maturity of March 2025. The company closed on $850 million at that time, replacing its existing undrawn revolving credit facility that was due to expire in August of that year.

Like in the previous deal, the current credit agreement has a sustainability-linked pricing mechanism that decreases the borrowing spread if certain benchmarks are achieved each year.

BofA Securities Inc. and Wells Fargo Securities LLC served as joint bookrunners. BofA is also the sustainability structuring agent, while Bank of America serves as administrative agent. JPMorgan Chase Bank N.A. and U.S. Bank National Association are acting as joint lead arrangers and U.S. Bank National Association is the documentation agent. Bank of Montreal and Goldman Sachs Bank USA are the senior managing agents.

Latest moves at ESRT

Recently, ESRT made some noteworthy changes to its leadership. In February, Christina Chiu was promoted to president, while Stephen Horn is now serving as executive vice president, chief financial officer & chief accounting officer.

The REIT’s portfolio includes some 8.6 million rentable square feet of office space, with a smaller part of assets under ownership representing retail space and residential units. ESRT’s flagship Empire State Building recently landed Greater New York Mutual as tenant. The insurance company signed a 52,116-square-foot lease to occupy a full floor at the 102-story skyscraper.

Other recent significant deals included a 67,865-square-foot lease expansion at 1400 Broadway, as Burlington Stores Inc. committed to a total of 170,763 square feet for 16 years. The REIT also signed a 57,203-square-foot leasing agreement for 11 years at One Grand Central Place with skincare and beauty brand Sol de Janeiro.

As of February, Manhattan’s office vacancy rate stood at 16.5 percent, according to a recent CommercialEdge report. The borough’s vacancy recorded a 100-basis-point decrease over a 12-month period.