A joint venture owned 20.1 percent by Vornado Realty Trust has completed an $800 million refinancing of 650 Madison Avenue in Manhattan. The 10-year interest-only loan carries a fixed rate of 3.486 percent and matures in December 2029. The refinancing replaces a previous $800 million loan that bore interest at a fixed rate of 4.39 percent and was scheduled to mature in October 2020.
READ ALSO: Vornado Refinances NYC Mixed-Use for $580M
The 27-story, 600,000 square foot, Class A Manhattan office property with street-level retail was completed in 1987, underwent a cosmetic renovation in 2013 and currently has a mere 1.1 percent vacancy rate, according to Yardi Matrix data. One of the tower’s major tenants is Ralph Lauren, at 274,000 square feet, and Sotheby’s International Realty, which occupies 37,800 square feet.
Vornado’s announcement provided no information about the lenders and Vornado did not reply to Commercial Property Executive’s request for that and other information.
Interest rates down, rents up
Given current interest rate conditions, it’s no surprise that Vornado has been on a steady roll of refis. In January, a joint venture owned 45.1 percent by Vornado closed a $167.5 million refinance of 61 Ninth Ave. in Manhattan’s Meatpacking District. The following month, Vornado completed a $580 million interest-only refi of the 1.1-million-square-foot, mixed-use property at 100 W 33rd St. in Midtown.
It’s a good time to be an office landlord in Manhattan, according to a third-quarter report from Newmark Knight Frank. Average asking rents hit a record $79.25 per square foot, $2.3 higher than in the second quarter. The increase came in tandem with an above-average 10.6 million square feet of leasing activity and despite availability nudging up a bit, to 11.8 percent, also per NKF.