Cassidy Turley Orchestrates $54.4M Financing Deal for UFT Headquarters

Cassidy Turley went to bat for the United Federation of Teachers and hit a home run with the arrangement of $54.4 million of financing for the union's headquarters at 50 Broadway in Manhattan.

July 26, 2011
By Barbra Murray, Contributing Editor

Cassidy Turley went to bat for the United Federation of Teachers in the capital market and hit a home run with the arrangement of $54.4 million of financing for the union’s 350,000 square-foot headquarters building at 50 Broadway in Downtown Manhattan.

The UFT has called 50 Broadway home since acquiring the 37-story tower, originally developed in 1927, for approximately $54 million in 2002. The union occupies a portion of the building and leases the remaining space to third party occupants.

For most hopeful borrowers, obtaining financing is still not a cakewalk these days. However, Cassidy Turley was able to attract more than a few lenders for its client, with which the firm has a longstanding relationship. Ultimately, M&T Bank was the best option. The bank provided a seven-year, fixed-rate loan — and then some.

“We took it to the CMBS market, we took it to the insurance companies, we took it to banks,” Neil A. Lipinski, senior managing director with Cassidy Turley, told Commercial Property Executive. “It was a competitive process.”

Soon after bidding got underway, the UFT expanded Cassidy Turley’s assignment.

“We realized that in addition to the cost of the debt, the flexibility of the relationship beyond the loan process was important,” he added. “Once we understood that those elements, it became clear that we had to go with a bank, rather than a CMBS or insurance lender.”

A bevy of factors spurred some 20 institutions to respond to Cassidy Turley’s RFP. “The UFT represents 150,000 members in New York City, so they’re not going anywhere,” Lipinski said. “Secondly, the building is 93 percent occupied so it has a high occupancy level in this environment. Third, the UFT itself occupies roughly 20 percent of the building so those three factors right there gave lenders a lot of comfort that this was a good loan to make.”

And there were even more reasons why financiers look favorably upon the UFT. “Two other key elements were the fact that the loan-to-value percentage was fairly low so that gave lenders a fair amount of confidence that they could lend this kind of money,” said Mark P. Boisi, chairman, NY TriState, with Cassidy Turley. “Number two, and probably most important, is the relationship that was going to be made between the UFT and M&T Bank, the final bank that we chose. Not only was it going to be a lending relationship on a first-mortgage basis, it was also going to involve a letter of credit replacement of $20 million on another asset that the UFT occupies adjacent to 50 Broadway. They were going to get a $15 million line of credit from M&T Bank as well. So, they were starting a banking relationship with M&T. All those factors together made it compelling for both parties.”

The deal expands and further solidifies the bond between Cassidy Turley and the UFT. “One of the most gratifying aspects of being able to close this transaction with the UFT was the fact that we provided capital market services for them,” Lipinski said. “We do leasing and management for their headquarters building. We’ve had a relationship for 10 years and to be able to provide this additional level of service to them is gratifying.”