BXP and the Moinian Group have reached a deal to refinance a loan held by BXP that the joint venture had previously defaulted on.
The debt is tied to the site of a planned office tower in Hudson Yards dubbed 3 Hudson Yards. BXP, formerly Boston Properties, had provided an $80M loan to the joint venture when it came on as a partner in 2018, but the JV failed to pay it off at maturity last summer, and default interest has piled up.
But the largest office REIT in the U.S. closed on a $108M loan last week to refinance the defaulted mortgage and originated a new, $50M mezzanine loan to the venture, according to its third-quarter earnings release issued Tuesday.
The empty lot at 3 Hudson Blvd., as of September 2024
The loan’s unpaid, accrued and default interest had ballooned to approximately $131M, according to the release. The senior loan has a floating interest rate of the secured overnight financing rate plus 5.25%, while the mezz loan has a floating rate of SOFR plus 7.25%.
The senior loan tied to the site, which has an alternative address of 400 11th Ave., was provided by JPMorgan Chase, PincusCo reported. BXP has funded $17.6M of the $50M mezz loan to date, according to its earnings release.
TOP FINANCING DEALS
The owners of a 220K SF office in Union Square have netted a significant refinancing deal from two European banks.
Cannon Hill Capital, Williams Equities and Global Holdings refinanced the 1881-built office at 888 Broadway with a $130M mortgage from DekaBank and Crédit Agricole, The Real Deal reported.
Streaming giant Netflix is the building’s anchor tenant, signing a 100K SF lease in 2019. The property includes an annex next door at 38 E. 19th St., leased to software company Atlassian, and leases its retail space to three Jean-Georges-run restaurants and ABC Home & Carpet.
Canon Hill Capital has owned the mixed-use building since it acquired Normandy Real Estate Partners in 2022. Normandy paid $133M for the property in 2017. Cannon Hill brought Global Holdings and Williams Equities into the deal this February with a more than $200M recapitalization. Williams Equities contributed the ground underneath the annex to cement the partnership
Normandy and Invesco borrowed $200M from TPG Real Estate Finance in 2019 against the building.
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Stagg Group of New York scored a $31.9M mortgage to retire its construction loan for a mixed-income Bronx apartment building at 4180 Carpenter Ave. The property is 98% leased and has 64 market-rate units and 28 affordable apartments. The new debt is a fixed-rate Freddie Mac loan with a 10-year term from Berkadia. Berkadia’s Matt Nihan arranged the financing on behalf of the sponsor.
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Slate Property Group netted a $64M, three-year, floating-rate loan from Starwood to refinance a 162-unit Brooklyn multifamily building. The Welz at 159 Boreum St. is a 96% leased development completed in February. Slate will use the proceeds to retire the existing loan, cover closing costs and complete lease-up. The building has a 421-a tax abatement, and 49 units are set aside as affordable housing.
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PGIM Real Estate, SJP Properties and Norges Bank Investment Management refinanced $507M for the 11 Times Square office building at 640 Eighth Ave., also known as Eleven X, PincusCo reported. The lenders were JPMorgan Chase, Deutsche Bank and Wells Fargo. The two-year, floating-rate, interest-only loan replaces a $507M loan from New York Life Insurance Co., Northwestern Mutual Life Insurance Co. and the New York State Teachers’ Retirement System. The building is split into a retail condo and an office condo.
TOP LEASES
Sierra signed for 15K SF of office space this week at Manova Partners’ 375 W. Broadway.
Conversational artificial intelligence customer experience platform Sierra signed its first New York City lease, taking 15K SF at Manova Partners’ 375 W. Broadway. The full-floor deal keeps the five-story SoHo jewel box building, where the landlord is overseeing its first renovations since 2014, fully occupied. The other office tenant in the 162-year-old property is Square Inc., while Gucci occupies the ground floor. CBRE’s Jeff Fischer and Connor Krup represented the tenant. Newmark’s Brett Harvey represented the landlord.
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Fintech firm Stripe has expanded by 140K SF at Fosun International’s 28 Liberty St., bringing its total footprint to 286K SF, Commercial Observer reported. The company subleased 147K SF of the 2M SF building in June 2024, Bisnow first reported. Stripe tacked on a direct lease and will occupy eight floors in total, paying asking rents between $75 and $80 per SF for its new space. Fosun was represented by JLL’s Peter Riguardi, John Wheeler, Mitchell Konsker and Michael Berman. Jeff Fischer and Sacha Zarba of CBRE represented Stripe.
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Stakeholder strategy firm FGS Global leased 80K SF at Vornado Realty Trust’s Penn 2, The Real Deal reported. Asking rents in the 15-year deal were $115 per SF. FGS will move from Vornado’s 909 Third Ave. to Penn 2’s full 16th floor and part of the 17th floor. Other tenants in the building include Major League Soccer, Universal Music Group and Verizon. CBRE’s Michael Liss represented the tenant. A Cushman & Wakefield team led by Josh Kuriloff and Bruce Mosler represented Vornado, with in-house help from Josh Glick and Jared Silverman.
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Tech firm Verra Mobility signed a 57K SF sublease at 55 Water St., Commercial Observer reported. The sublandlord, Health Insurance Plan of Greater New York, was represented by CBRE’s Paul Haskin. The subtenant was represented by Newmark’s Ira Rovitz, Chris Ventura and Rohan Kapoor. The 3.9M SF, 53-story building, New York City’s largest office building by square footage, is owned by the Retirement Systems of Alabama.
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National Bank of Canada signed an 18K SF lease at Park Avenue Tower, a 36-story office tower at 65 E. 55th St., Commercial Observer reported. Asking rents were more than $125 per SF at the building, which also counts Avista Healthcare Partners and Eagle Capital Management as tenants. A Blackstone subsidiary owns the building, but it is under contract to be sold to SL Green for $730M. Newmark’s Jared Horowitz, Brian Waterman and Brent Ozarowski represented the landlord, while their colleagues Cooper Weisman and Neil Goldmacher represented the tenant.
TOP SALES
Vornado acquired 136 and 138 W. 34th St. from family-run firm Jenel Management.
Vornado acquired two Herald Square retail properties at 136 and 138 W. 34th St. from Jenel Management for $19.1M, Crain’s New York Business reported. The two properties were set to be auctioned off to settle a $24.9M judgment against Jenel after a lawsuit from lender Citigroup Global Markets, but the court called off the auction as a result of the sale. The two-site, 5K SF parcel served as collateral for a $30M loan issued in 2014. Jenel still owes Citigroup roughly $6M toward the five-story properties, but it has retained an ownership stake in the Vornado venture.
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An investment fund managed by Morgan Stanley Real Estate has bought a FedEx-leased industrial facility adjacent to LaGuardia Airport for $86.7M, Commercial Observer reported. FedEx has just over 17 years left on its lease. Blackstone subsidiary Revantage sold the 117K SF facility at 83-15 24th Ave. and 83-84 23rd Ave. JLL’s Tyler Peck, Andrew Scandalios, John Huguenard, John Plower, Nick Stefans and Jason Lundy brokered the sale.
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Lender Madison Realty Capital has taken control of a partially complete luxury rental development at 1580 Nostrand Ave. from its developer, Crain’s reported. Hello Living acquired the site for $13.1M in 2014 and attempted to develop apartments, but the development’s financial and foreclosure issues led to Hello Living placing it in bankruptcy protection in March 2024. MRC paid $70M to buy it from the bankrupt entity.
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Ponte Gadea has sold an 85K SF office at a huge discount, PincusCo reported. Sioni Group bought 366 Madison Ave. for $50M with a $28.5M loan from Valley National Bank. Ponte Gadea, the family office of Zara billionaire Amancio Ortega, had owned the property since 2006, when it paid $115.5M.
Ethan Rothstein contributed to this story.
