SL Green Closes on $1.5B Construction Loan for One Vanderbilt
Danielle Balbi Sept. 28, 2016, 12:40 p.m.
It’s getting vander-built!
SL Green Realty Corp. has closed on its $1.5 billion construction financing for One Vanderbilt across from Grand Central Terminal in Midtown East. A group of five lenders, including Wells Fargo, Bank of New York Mellon, J.P. Morgan Chase, TD Bank and Bank of China, are taking down the loan, as Commercial Observer first reported in June.
Wells Fargo is taking the lead on the massive financing, while German bank Landesbank Baden-Württemberg is acting as the documentation agent on the deal.
The mortgage carries a term of up to seven years, and has a floating rate of Libor plus 3.5 percent. If certain pre-leasing and completion milestones are met, the rate can be reduced to 3 percent, according to an SL Green press release published today.
“Closing on the construction financing means that nothing stands in the way of One Vanderbilt becoming an iconic addition to the Manhattan skyline,” Robert Schiffer, a managing director at the real estate investment trust, said in prepared remarks. “One Vanderbilt will set a new standard for trophy buildings in Midtown Manhattan. It will respond to the needs of the modern workforce, offering tenants technologically advanced, Class A office space with best-in-class amenities and unparalleled proximity to public transportation.”
SL Green faced many challenges before finalizing the construction debt on One Vanderbilt. During the rezoning of the Vanderbilt Avenue corridor, Grand Central Station owner Andrew Penson filed a $1.1 billion lawsuit against the REIT and the city of New York for not requiring the purchase of the air rights over the historic station. The lawsuit was settled last month, according to an SL Green statement released at the time.
Vertical construction at the blockwide site between East 42nd and East 43rd Streets is expected to commence in the second quarter of 2017, according to the release. Kohn Penderson Fox is designing the 58-story, 1.6-million-square-foot tower and Tishman Construction is the construction manager of the project, and Hines is the development manager.
TD Bank, one of the lenders of the deal, is signed on as a tenant in the tower, having pre-leased 200,000 square feet of space for 20 years. It will have both an office and retail space in the building.
Representatives for Bank of China, TD, BNY Mellon and Wells Fargo were not immediately available for comment. A spokeswoman for J.P. Morgan declined to comment.