Natixis Facilitates First “Green Bond” CMBS Deal

The firm issued the first green-specific tranche in a CMBS to refinance part of Ivanhoé Cambridge and Callahan Capital Properties’ $358.6 million acquisition loan for New York City’s 85 Broad St.

85 Broad St.
85 Broad St.

Noting it received “very strong interest” from major green investors across the globe, French corporate and investment bank Natixis collaborated with Ivanhoé Cambridge and Callahan Capital Properties to issue the first green tranche in a CMBS to refinance part of the acquisition loan for 85 Broad St. in Downtown Manhattan.

The $72 million green-specific tranche was issued as part of the CSAIL 2017-C8 CMBS Securitization to refinance part of the $358.6 million fixed-rate, first mortgage loan provided by Natixis in the spring to purchase the 1.1 million square-foot office tower in the Financial District.

“This financing is a great example of how like-minded global players are able to work together to bring new green initiatives to the market, which is right in line with Ivanhoé Cambridge’s commitment towards sustainability,” Nathalie Palladitcheff, executive vice president & CFO at Canadian-based Ivanhoé Cambridge, said in a prepared statement.

What started it All

Longtime strategic partners Ivanhoé Cambridge and Callahan Capital Partners acquired the 30-story office tower in late May from a joint venture of MetLife Real Estate and Beacon Capital Partners for approximately $650 million. It was the partners’ first purchase in Downtown Manhattan. The former headquarters for Goldman Sachs, the building between South William and Pearl streets is 88 percent occupied with tenants including Oppenheimer & Co., WeWork, Nielsen and Vox Media.

In January, the property obtained a LEED Platinum Certificate for Existing Buildings: Operation & Maintenance. Natixis said in a prepared statement that it commissioned oekom research AG, one of the world’s leading rating agencies in the field of sustainable investment, for a second party opinion on the green tranche. The firm confirmed the alignment of the 85 Broad Street Loan-Specific Certificates with the Green Bond Principles’ Green Use of Proceeds Securitized Bond’s formal concept.

Stephen Liberatore, CFA, managing director/lead portfolio manager-responsible investment fixed income at TIAA Investments pointed to the importance of the oekom research second party opinion and report.

“We are better positioned to assess and communicate to our own investors the environmental benefits of investing in 85 Broad Street, Platinum LEED certified office building,” Liberatore noted in a prepared statement.

 

Growing “green” interest

Natixis said the transaction extends its green financing strategy to the U.S. commercial real estate securitization market and called it a “first step in the CMBS market which will contribute to diversify the green investment opportunities for investors” while maintaining the standards the Green Bond Principles are trying to safeguard.

The bank noted that there was very strong international interest in the green tranche from investors in the United States and overseas, adding that it was oversubscribed.

“With nearly $20 billion of loans securitized since 1999, Natixis is a proven leader in the CMBS market. Natixis endeavors to bring real assets to investors and is pleased to bring to the CMBS market the opportunity to invest in recognized sustainable investments,” Managing Director Benjamin Sirgue, head of Natixis Global Finance Americas, said in prepared remarks.

 

While it wasn’t green financing, Natixis also recently provided a $250 million fixed-rate, first mortgage to JEMB Realty to refinance nearby 75 Broad St., a 34-story, 650,000-square-foot office building. JEMB Realty is repositioning the office tower to attract high-tech tenants.