Durst Office Condo Seals $120M Syndicated Loan From Capital One
By Matt Grossman April 1, 2019 11:23 am
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Capital One (COF) has syndicated a $120 million loan against a Midtown South office condominium controlled by The Durst Organization, the bank announced today.
The mortgage, lent against the office portion of 855 Avenue of the Americas, affords permanent financing to the asset three years after the structure opened to renters. Capital One will hold $50 million of the debt on its balance sheet, having placed a $45 million portion of the financing with TD Bank and a $25 million piece with Bank United, a Capital One spokesman said. Durst will pay fixed interest at a rate a hair above 4 percent, according to a spokesman for the company.
“This transaction highlights our appetite for low-leveraged core office asset financings,” said Jonathan Smith, a Capital One lending executive. “In this case, the fact that we have an exceptional sponsor for a property in the growing Penn Plaza submarket makes it even more attractive.”
Sportswear maker Nike leases the five-story 150,000-square-foot office space in a building that’s predominantly taken up by rental apartments on the higher floors. Twenty percent of the apartments in the tower—the residential part is known as Eos—are reserved for tenants who pay below-market rent.
Ira Marx, Durst’s chief financial officer, said that a competitive bid won the day for the McLean, Va.-based bank.
“Capital One was responsive to our needs and offered highly competitive pricing,” Marx said. “We welcomed the opportunity to extend our business relationship with Capital One.”
In a move that presaged growing hype around Midtown South office space, Durst lured Nike to the office condo in 2015 from its previous digs at Google (GOOGL)‘s 111 Eighth Avenue. The 11-year lease Nike signed at the time will carry Durst through the majority of the new Capital One loan’s 10-year term.
Asking rents were $78 per square foot, Crain’s reported at the time.
