SL Green JV Lands $496M Loan Extension for Manhattan Tower
The original $510 million note dates back to 2020.
SL Green Realty Corp. and Meritz Alternative Investment Management have obtained a modification and extension of the mortgage on The Daily News Building, a 37-story, 1.2 million-square-foot office high-rise in New York City’s Manhattan. CBRE advised the lenders, Aareal Capital Corp., Citi and Credit Agricole.
The adjustment involved a paydown of the principal balance by $9 million to $496.4 million and an extension of the maturity date by more than three years from July 2024 to December 2027. The interest rate remained fixed at 6.77 percent—2.75 percent over term SOFR—through the maturity date.
In 2020, Aareal Capital Corp., Citi and Credit Agricole issued a $510 million note for SL Green’s office high rise. The firm used the proceeds to repay the balance on its $1.5 billion unsecured revolving credit facility. One year later, SL Green sold a 49 percent stake in The News Building for $790 million. A real estate fund managed by Meritz Alternative Investment Management purchased the stake.
READ ALSO: CRE Midyear Outlook: The Calm After the Storm
The 1930-built tower features 24-foot column spacing and floorplates ranging from 7,500 to 73,000 square feet. Additionally, the property includes a 12-foot slab height, renovated lobbies, as well as new bathrooms and corridors.
The tenant roster of the 91 percent-leased building includes The United Nations Development Program, WPIX, Omnicom Group and Visiting Nurse Services, to name a few.
Having attained LEED Gold, WiredScore Platinum and WELL Health-Safety certifications, the building features HVAC systems equipped with MERV-14 filters, LED lighting systems, as well as color-coordinated recycling procedures, among others.
Located at 220 E. 42nd St., The Daily News Building is within walking distance of Grand Central Terminal and the Queens-Midtown Tunnel. Multiple restaurants and retail options are also nearby.
CBRE Vice Chairman Doug Middleton led the negotiations on behalf of Aareal Capital Corp., Citi and Credit Agricole.
The Daily News Building’s story
Hood and Howells—also the architects behind Chicago’s Tribune Tower—designed the project nearly a century ago. At the time, the building was among the first tall structures in New York without an ornamental spire.
The 1919-founded New York Daily News had occupied the building—also giving it its current name—until 1995, after which the Art Deco property was converted to office use. What’s more, the building served as inspiration for certain elements in the original Superman comics.
Dealing with the looming office debt maturity
More than $260 billion in office loans have recently matured or will do so by the end of 2026 nationwide—encompassing 30 percent of all office loans and upward of 12,000 properties. Of the total, $187.7 billion, or 71.4 percent, involve Class A buildings.
CBRE researchers found that the more exclusive prime office buildings are overcoming the negative trends dominating the office scene, maintaining an average vacancy of 14.8 percent during 2024’s first quarter, 450 basis points below the national average.
A total of 55 prime office buildings are found in Manhattan, a fact mirrored by the market’s vacancy rate, which stood at 16.6 percent as of June, according to a CommercialEdge report. The value was 60 basis points lower than last year’s figure.
Despite high CRE interest rates, such buildings are still closing refinancing deals. For instance, just last month Brookfield Properties secured a $750 million refinancing loan for One Liberty Plaza, a 2.3 million-square-foot office tower in Lower Manhattan. Morgan Stanley was among the lenders.
In another type of deal, SL Green and Vornado Realty Trust closed on a two-year extension for a $1.1 billion securitized mortgage on 280 Park Ave. in April.
You must be logged in to post a comment.