Empire State Realty Trust closed on an $850 million, four-year unsecured revolving credit agreement to replace the company’s existing undrawn revolving credit facility that was due to expire in late August. The new credit facility has an initial maturity of March 31, 2025, with two six-month extensions at the company’s option.
The credit agreement with a group of financial institutions also has a sustainability-linked pricing mechanism that reduces the borrowing spread if certain benchmarks are achieved each year.
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Christina Chiu, ESRT’s executive vice president & chief financial officer, said in a prepared statement the new four-year facility maintains the REIT’s “robust liquidity position” and extends its balance sheet flexibility. She said the transaction reinforces lenders’ views of ESRT “as an experienced, well-capitalized owner and operator of quality assets and ESRT’s ability to access the capital markets.”
The credit facility was arranged by BofA Securities, Wells Fargo Securities, Capital One National Association, JPMorgan Chase Bank and U.S. Bank National Association as joint lead arrangers. Bank of America is the administrative agent, while U.S. Bank National Association is the documentation agent and Bank of Montreal and Goldman Sachs Bank USA are senior managing agents. Other lenders include KeyBank National Association and Morgan Stanley Senior Funding.
ESRT is the owner and operator of about 10.1 million square feet of office and retail assets in the New York metro region, including the iconic Empire State Building in Manhattan.
In January, ESRT signed two leases totaling about 50,000 square feet of space at One Grand Central Place, 60 E. 42nd St., across the street from Grand Central Terminal. The latest additions to the Midtown Manhattan skyscraper were law firm Belkin Burden Goldman LLP and Dime Community Bank. The REIT signed a new 11-year lease for 39,100 square feet in December at 111 West 33rd St. with ClearView Healthcare Partners, which also had 10,539 square feet at the property.
In November, Swedbank, a Stockholm-based banking group, signed a 7,905-square-foot lease at the Empire State Building. A month earlier, ESRT leased 212,200 square feet of space at the Empire State Building in October to Centric Bands, which had occupied the space on a sublease from Global Brand Group.