Viacom’s lease renewal and expansion at 1515 Broadway, which will lead to the company taking the entirety of the building’s leasable space, was preceded by one of the largest commercial mortgage loans the city has seen recently.
The Bank of China’s penchant for Class A Manhattan office buildings, and its history at 1515 Broadway, led to the blockbuster loan. The $775 million first mortgage that the bank provided recently will allow owner SL Green Realty Corp. to replace previous $447 million financing that had been in place since 2009—also from the Bank of China. According to SL Green, the difference will be used to pay for the transaction and “for general corporate purposes.”
Simon Cices, a partner in the New York office of Atlanta-based Troutman Sanders represented the Bank of China, in both the 2009 loan and this most recent refinancing. He told The Commercial Observer that the loan was negotiated both with and without Viacom in mind.
“The outside date for Viacom to make its decision had not yet arrived but the bank basically did its analysis under either scenario, which is the right thing to do for any conservative bank,” Mr. Cices said, adding that the bank has been a client for twelve years now. “We think this is a great loan to make—it’s a great property.”
The loan is for a term of 7 years and was brokered by HFF, according to sources. Familiarity with the building, SL Green and with Viacom as a tenant definitely helped move the process along, Mr. Cices said, even with several balls in the air at once.
“The Bank of China has made other loans to SL Green—600 Lexington Avenue is a loan that they have, 3 Columbus Circle—there are a few,” Mr. Cices explained. “So there is an ongoing relationship and trust between the two companies. This one went pretty quickly. From term sheet to closing—I’d like to say 2 months. Since we had represented the Bank of China in 2009 when they did the last iteration of the loan, we were very familiar with the Viacom lease as it existed, and since they were by far the largest tenant it made the legal analysis much easier.”
Mr. Cices has been representing them for 12 years. “But in the beginning,” he said, “it started small and slowly and as they developed knowledge of America and New York they have made some decent sized loans outside of New York. But New York is a particular focus of theirs.”
He has been representing them for 12 years, he said. “But in the beginning it started small and slowly and as they developed knowledge of America and New York they have made some decent sized loans outside of New York. But New York is a particular focus of theirs for obvious reasons since they’re based in New York.
As far as placing other New York-area financing, the bank is always open to new opportunities. “In any business in this world in today’s economy, they say ‘If you’re not moving forward, you’re moving backward,’” Mr. Cices said. “They’re always looking.”