225-233 Park Avenue South Latest NYC Loan to Hit CMBS Market

Following 330 Madison Avenue and the GM Building, it's in good company..


Orda Management Corp’s loan on 225233 Park Avenue South is the latest to hit the CMBS market. According to a presale report from Kroll Bond Rating Agency today, $70 million of the property’s $235 million senior mortgage will be securitized in the Wells Fargo-sponsored WFCM 2017-C39 conduit. An additional $45 million was securitized in the issuer’s WFCM 2017-C38 conduit earlier this month, and $120 million will be securitized in future deals.

The $70 million loan is the largest in the transaction, accounting for 6.2 percent of the deal. It is secured by a 675,756-square foot Class-A office property comprising two interconnected buildings, located in the Gramercy Park district of Manhattan; 225 Park Avenue South is a 19-story, 503,104-square-foot building that was built in 1910, and 233 Park Avenue South is a 13-story, 172,652 square foot property that was completed in 1909. Orda Management has owned both buildings since 1954 and recently invested $81.9 million in capital improvements, including a lobby renovation and new outdoor spaces, according to the KBRA  report. The property is currently 97.9 percent leased to 10 tenants, the largest of which are Facebook, Buzzfeed and STV.

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Barclays Bank provided a $235 million senior loan and $195 million mezzanine loan on the property in early June, as first reported by The Wall Street Journal.  The financing package was used to refinance $226.4 million of existing debt that was provided by New York State Teachers’ Retirement System, and also to fund reserves, pay closing costs, and return approximately $159.4 million of equity to the sponsor. Jordan Roeschlaub, co-head of Newmark Knight Frank‘s debt & structured finance group, brokered the debt. 

Including the $70 million loan on 225-233 Park Avenue, Barclays contributed 11 loans in total to the WFCM 2017-C39 securitization, or 26.6 percent of the pool. Of those loans, eight were refinances, two were acquisition loans and one was a recapitalization loan.

The property is the latest of many New York City properties to appear in CMBS transactions. As first reported by Commercial Observer, the $500 million loan on Vornado Realty Trust’s 330 Madison Avenue was securitized earlier this month in Wells Fargo’s privately placed MAD Mortgage Trust 2017-330M deal, and Morgan Stanley’s single-asset, single-borrower BXP Trust 2017-GM deal is collateralized by a $1.55 billion portion of the $2.3 billion loan on Boston PropertiesGeneral Motors Building at 767 Fifth Avenue.

Seems like CMBS is not-too-shabby a financing option at the moment…