SL Green, PGIM to Land $1.4B Refi for Manhattan Tower
The Flatiron District property spans 2.3 million square feet.
A joint venture between SL Green Realty Corp. and PGIM Real Estate will close on a $1.4 billion fixed-rate mortgage loan for 11 Madison Avenue, a 2.3 million-square-foot office building in Manhattan. Computershare Trust Co. is the trustee.
Wells Fargo Bank, JP Morgan Chase Bank, Bank of America, Goldman Sachs Bank, German American Capital Corp. and Bank of Montreal will originate the loan by the end of the month. Trimont acts as special servicer.
The borrower will use the proceeds to repay existing debt and fund a tenant improvement and leasing commission. Previous financing includes a $1.1 billion loan originated in September 2015 by Wilmington Trust, according to Yardi Research Data. That note matured earlier this month.
SL Green purchased the LEED Gold-certified asset in September 2015 from The Sapir Organization for roughly $2.4 billion, the same source shows. A year later, PGIM acquired a 40 percent ownership stake in the property for $480 million.
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Located in Manhattan’s Flatiron District, the 30-story tower is within walking distance of Madison Square Park and the Flatiron Building. The Empire State Building is less than 1 mile away.
Completed in multiple phases between 1932 and 1950, the property underwent cosmetic renovations in 1997 and 2018. Initially dubbed Metropolitan Life North Building, the tower was supposed to rise 100 stories, but The Great Depression halted the original plan.
The high-rise has floorplates averaging 103,630 square feet, as well as 30,000 square feet of retail space. Building amenities include a fitness center, cafeteria and auditorium.
Between 2016 and 2024, the property maintained an occupancy level above 95 percent. Current tenants include Sony Corp. of Americas, Suntory Holdings and William Morris Entertainment.
Improving landscape for office loan originations
Office loan originations saw a 140-percent increase year-over-year as of the second quarter of this year, according to a Mortgage Bankers Association survey. However, note originations for office assets dropped 18 percent compared to the previous quarter.
In May, Blackstone obtained an $850 million CMBS loan to acquire a 49 percent stake in 1345 Avenue of the Americas, a 1.9 million-square-foot office tower in Midtown Manhattan. JP Morgan Asset Management previously owned the stake.
Recent notable deals also include The Durst Organization’s $1.3 billion in refinancing of One Five One, a 1.8 million-square-foot office tower. The Times Square building rises 48 stories.
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