Lipstick Building Touches Up its Financing
- Jul 10, 2008
Manhattan’s Lipstick Building, the distinctive elliptical high-rise at 885 Third Avenue, has undergone a successful restructuring of its financing with Goldman Sachs. In addition to restructuring the preferred-equity portion of the building’s financing, owners Metropolitan Real Estate Investors L.L.C. have increased their stake in the property (pictured). “The restructuring of the Lipstick Building’s financing reflects the enduring value of prime commercial real estate in the heart of Manhattan,” Metropolitan chairman Haim Revah said in a prepared statement. The Wall Street Journal has reported that a $60 million preferred-equity loan to Metropolitan and its partners from Goldman Sachs was due today and that the borrowers refinanced the loan for three more years at 12 percent. Also according to the Journal, Metropolitan and their partners reduced the loan’s principal amount to $45 million by putting in additional equity. During that process, Metropolitan brought Argentinian real estate investor IRSA Investments & Representations Inc. into the ownership structure, replacing another equity partner, Israel-based Tao Tsuot Ltd. IRSA reportedly paid $22.7 million for Tao’s share, substantially less than what Tao had originally paid. The building, designed by architect Philip Johnson, is 97 percent occupied. Last December, the building’s primary tenant, Los Angeles–headquartered Latham & Watkins, one of the world’s largest law firms, expanded its space by about 70,000 square feet, bringing its total in the building to about 400,000 square feet, or roughly two-thirds of the building’s total leasable area.