Broad Street Development and Invesco Recap 80 Broad Street, Valued at $235M
Broad Street Development and new equity partner Invesco have completed a $235 million recapitalization on 80 Broad Street, between Stone and Marketfield Streets, according to an announcement from BSD. The rebuilt capital stack consists of an assumed $102 million first mortgage from AIG, an additional $30 million in mezzanine debt from the insurer and a fresh equity contribution from Invesco, representing a controlling stake in the building.
BSD purchased the 423,000-square-foot office tower in 2014 for $173 million with the help of the AIG mortgage, along with preferred equity from RXR Realty and Colony Capital. The addition of new financing from AIG and Invesco effectively removes that previous pair of preferred equity partners from the deal, the BSD statement says.
Four years remain on AIG’s original seven-year mortgage, set for payoff in 2021.
“We are reinvesting in Downtown Manhattan in a major way,” Raymond Chalme, the CEO of BSD, said in a statement. “We believe in this asset and the market, and we know that working with…Invesco, we can make further improvements to 80 Broad Street so it can achieve even greater success.”
Chalme’s firm is actively exploring other opportunities to work with the Atlanta-based investment management company in New York City, he added.
The 36-story building in Lower Manhattan is host to a handful of multifloor tenants, including law firm McGivney & Kluger and the interior-decorations outfitter The Robert Allen Group, but the majority of companies who lease space in the building occupy less than 5,000 square feet each. That focus on smaller lessors is by design, David Israni, a BSD senior managing director, told Commercial Observer.
“We were big into having some smaller users here,” Israni said. “The floor plates lay out quite well for smaller [tenants].”
Competing buildings in the Financial District have cleared out entire floors to try to attract major, 20,000-square-foot tenants in recent years, Israni noted. That trend has slashed the supply available for small office tenants that want access to the neighborhood’s dense network of subways and transit options—especially technology and media companies that might be new to the area.
During the three years BSD has operated the building, it has been able to increase rents on some floors. “It’s just a flight to quality Downtown,” Israni said.
Proceeds from the new capitalization will go towards a refresh of the lobby and the building’s elevators. Tenants already have access to a bike room and a conference space, and more amenities are on the way, according to Israni.
AIG and Invesco did not immediately respond to a request for comment.