101 Park Avenue’s $365M Loan Hits CMBS Market in SASB Deal
The fixed-rate, interest-only 10-year Bank of America loan is secured by the borrower’s fee simple interest in the 1.3-million-square-foot, 48-story, Class-A office building, located between 40th and 41st Streets in Midtown, just south of Grand Central Terminal. The bond carries an AAA rating from Fitch Ratings.
Proceeds of the loan are being used to refinance $309 million in existing debt—also provided by Bank of America and securitized in the BAMLL 2012 PARK CMBS deal, fund $6.3 million in upfront reserves and return roughly $45.8 million of sponsor equity, Fitch’s presale report shows. “Based on the as-is appraised value of $1.5 billion, the borrower has approximately $1.1 billion of implied equity remaining in the property,” Fitch analysts wrote.
The previous CMBS loan wasn’t set to mature until 2022 but H.J. Kalikow decided to refinance early in order to avail itself of advantageous rates, Richard Nasti, an executive vice president at the firm, told CO.
The new $365 million mortgage has a underwritten net cash flow debt service coverage ratio of 3.51x, a loan-to-value of 24 percent and debt of $284 per square foot.
Peter Kalikow has owned the land beneath 101 Park Avenue since 1978 and constructed the building in 1982. Today, the property comprises 1.2 million square feet of office space, 43,590 square feet of retail space, 23,399 square feet of storage space and a 37,399-square-foot parking garage.
As of May, the property was 89.7 percent leased to 30 tenants. Sixty-one percent of its tenants have leased space at the building since its opening, including the three largest tenants—law firms Morgan Lewis & Bockius, Kelley Drye & Warren and Curtis, Mallet-Prevost, Colt & Mosle.
As previously reported by Commercial Observer, the American Kennel Club (AKC) is relocating its corporate headquarters to the building from St. Louis, Mo., leasing 60,000 square feet of space and housing its two-story Museum of the Dog there. AKC’s lease started in June but it has six months of free rent, which coincides with the timeline of the tenant’s buildout, according to the Fitch report. When completed, passers by on 40th Street will experience images of various dog breeds projected onto the street.