Natixis Issues First Green CMBS Rake Tranche Backed by 85 Broad Street
“It’s not easy being green,” once sang Kermit the Frog. But, all evidence points to the contrary.
Natixis has issued the first “green” commercial mortgage-backed securitization rake tranche backed by 85 Broad Street. The issuance was oversubscribed after being met with strong demand from both U.S. and overseas investors, according to an announcement by the lender today.
The $72 million green-specific tranche (the ’85 Broad Street Loan-Specific Certificates’), issued in collaboration with Ivanhoé Cambridge and Callahan Capital Properties, is part of the Credit Suisse-sponsored CSAIL 2017-C8 CMBS deal. The issuance refinances part of the $358.6 million fixed-rate, first mortgage loan that Natixis provided to Ivanhoé Cambridge for its acquisition of the Lower Manhattan property.
Built in 1983 and renovated in 2015, 85 Broad Street is a 1.1-million-square-foot, 30-story office building which spans a full block between South William and Pearl Streets. Its largest tenant is WeWork, which leases 292,956 square feet on a lease that expires in 2033. Goldman Sachs occupied the property for several decades before moving to 200 West Street in 2010.
The property received a Leadership in Energy and Environmental Design platinum certificate (the highest LEED rating) in January. Additionally, Natixis commissioned oekom research—a Germany-based rating agency that specializes in sustainable investment—for a second-party opinion on the green tranche; oekom provided a positive opinion in terms of the sustainability quality of the property.
The $72 million tranche is a first step in “the growing role [that] securitization formats will take in green financing,” the announcement reads, and will diversify green investment opportunities for investors while maintaining the green and transparency standards that Green Bond Principles intend to safeguard.
“With nearly $20 billion of loans securitized since 1999, Natixis is a proven leader in the CMBS market,” said Benjamin Sirgue, the head of Natixis Global Finance Americas, in prepared remarks. “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.”
Nathalie Palladitcheff, the chief financial Officer at Ivanhoé Cambridge added, “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.”