SL Green Nails Down $260M Loan on 3 Columbus Circle
- Apr 13, 2011
April 12, 2011
By Barbra Murray, Contributing Editor
The Midtown Manhattan office tower known as Three Columbus Circle has been refinanced. SL Green Realty Corp., co-owner with The Moinian Group of the approximately 770,000 square-foot office tower, secured a $260 million mortgage loan from a foreign bank and repaid a $250 million acquisition bridge loan originated by SL Green and Deutsche Bank at the beginning of the year.
News of the financing comes three months after SL Green recapitalized the 83-year-old property, located at 1775 Broadway across from the AOL Time Warner Center and Central Park, to the tune of $250 million, including a $138 million equity investment. With the recapitalization, SL Green became part owner of the asset through the creation of a joint venture with Moinian, which had acquired a former partner’s 90 percent stake in Three Columbus Circle for $250 million in 2004.
The Bank of China came through with the new financing, a five-year mortgage loan that comes with an earn-out option that would boost the loan to up to $300 million contingent upon certain performance achievements.
SL Green and Moinian are now in the midst of completing a $175 million transformation of the building into a top-of-the line office destination with as much as 80,000 square feet of Class A retail space. The partners anticipate that the comprehensive makeover will help attract premier tenants to the 26-story high-rise, which was about 20 percent leased when SL Green first agreed to the recapitalization in October 2010. The open spaces on the tenant roster, however, do not intimidate the partners, as they believe the office market is primed to absorb large blocks of square footage.
“As detailed in our December investor conference, there are only about a half dozen continuous blocks in Midtown in excess of 250,000 square feet, and the large block requirements in the market right now far exceed that inventory,” Marc Holliday, CEO of SL Green, said in January during the REIT’s earnings call for the fourth quarter of 2010. “Tenants known or rumored to be looking at the space 200,000 square feet and above includes such firms as Nomura, UBS, Bank of America, Morgan Stanley, Hobbis Advertising, J.Crew, Credit Agricola, Oppenhimer & Co., Coach, Wells Fargo, WilmerHale, Morrison Foerster, in addition to many, many others.”