Brookfield Nears $1.3B Manhattan Office Refi

Brookfield Properties is on track to secure a $1.3 billion loan package to refinance 660 Fifth Ave., a 1.3 million-square-foot office property rising 39 stories in Manhattan, N.Y., according to a report by Morningstar DBRS. The credit rating agency appraised the trophy tower at nearly $2 billion.

A consortium of Citi Real Estate, Barclays, ING Capital, Bank of America and Santander Bank will originate and sell the CMBS debt, which clocks in at $1.2 billion. The remaining note will take the form of an $89.4 million mezzanine loan. Wilmington will serve as trustee, while Trimont and Torchlight are set to act as servicer and special servicer, respectively.

The interest-only CMBS loan features a two-year term with three one-year extension options and an interest rate of 2.45 percent above SOFR.

Proceeds will go toward repaying previous debt, which, according to Yardi Matrix data, includes a $750 million note issued by ING Group in 2022 and a $300 million note issued by Apollo in 2018.

Brookfield acquired 660 Fifth Ave. in 2018 for more than $1.4 billion from Kushner Cos., the data provider shows. The owner has invested $611.3 million in the property since its acquisition, including a comprehensive $450 million renovation between 2020 and 2022.

Aligned with office space trends, the revamp consisted of updated mechanics, facade and interior improvements, including a new lobby. Powered by 100 percent renewable energy, the tower is LEED Gold certified. Notably, the property also features the largest single-pane windows of any high-rise building in North America.

Tenants include Macquarie, which opened its 250,000-square-foot workplace last year, marking the first signed lease post-renovation, as well as an unidentified company that inked a 500,000-square-foot lease last December and is currently building out their space, among others. The tower is 89.8 percent leased to six office and six retail firms.

Manhattan’s vacancy improves, financing flows

The property is in Manhattan’s Plaza District, a submarket that witnessed a resurgence in new leases in 2024 as companies in the financial and legal sectors started implementing return-to-office mandates.

At a macro level, Manhattan’s entire vacancy rate reflects that shift as the figure dropped 300 basis points year-over-year in August, ticking down to 13.6 percent, significantly below the national average of 18.7 percent, according to a Yardi Matrix report.

As vacancy improves, office financing deals continue flowing along. Earlier this month, PGIM, Norges Bank and SJP Properties secured a $507 million note to refinance 11 Times Square, a 1.1 million-square-foot office tower.

Last month, PGIM and SL Green obtained a $1.4 billion loan package backed by 11 Madison Ave., a 2.3 million-square-foot high-rise within the Flatiron District. Proceeds will be used to repay a previous $1.1 billion note.