SL Green, Vornado Snag $1.2B Refi for Manhattan Tower

The new loan on the 280 Park Ave. office building, now 97 percent leased following its emergence from a sweeping $150 million renovation, replaces the $900 million refinancing secured in 2016.

280 Park Ave. in Manhattan
280 Park Ave. in Manhattan

SL Green Realty Corp. and Vornado Realty Trust have reeled in big-ticket refinancing for 280 Park Ave. in Manhattan for the second year in a row. The co-owners of the nearly 1.3 million-square-foot trophy office property just closed a $1.2 billion loan, replacing the previous $900 million loan obtained in May 2016.

The current refinancing of 280 Park, sited in Midtown Manhattan’s Plaza District, came in the form of a floating rate, interest-only loan with a current rate of 2.97 percent—LIBOR plus 1.73 percent—and a maturity date in September 2024. Last year’s refinancing trailed the completion of a $150 million renovation and repositioning of the 1960s’-era tower. This time around, lenders were presented not just with a comprehensively upgraded asset, but one that is also 97 percent leased.

Refinancing frenzy

“2017 is a particularly busy year for the refinancing business,” as noted in a second quarter Manhattan office market report by real estate services firm ABS Partners Real Estate. The whirl of 10-year loans issued in 2006 and 2007 have a little something to do with it and, per the report, “further refueling the refinancing market is the continued historical low interest rates, despite the gradual return of rate hikes by the Federal Reserve.”

Other recent big-ticket refinancing deals in the Manhattan office market include 237 Park Ave., for which Walton Street Capital secured an $850 million loan to replace a $419.6 million CMBS mortgage. Crown Acquisitions and Oxford Property Group landed a $1 billion refinancing package for 641-645 Fifth Ave., and at 767 Fifth Ave., the Boston Properties-led consolidated joint venture ownership secured $2.3 billion to replace $1.6 billion in debt.

Image courtesy of Vornado Realty Trust