Wharton Properties, Brookfield Score $807M Refi for Crown Building’s Retail Portion
Apollo Commercial Real Estate Finance is providing a $807 million loan to Brookfield Properties and Jeff Sutton’s Wharton Properties to refinance the 92,000-square-foot retail condominium within the Crown Building, sources familiar with the transaction told Commercial Observer. The deal is closing today.
Wharton Properties and General Growth Properties — since acquired by Brookfield — purchased the trophy asset in 2015 for $1.8 billion. The deal was one of the largest in New York City real estate history at the time and financed with a $1.3 billion loan led by Deutsche Bank as well as $250 million in mezzanine debt.
Shortly after the purchase, the 400,000-square-foot building was split into the retail condominium and a non-retail portion on the upper floors, the latter of which was flipped to OKO Group — led by Russian billionaire developer and Aman Resorts chairman Vladislav Doronin — and SHVO for roughly $475 million. OKO is now redeveloping their part of the former office building into a luxury hotel and residential condominium units under the Aman brand. SHVO remains an equity partner in the deal but isn’t involved in the redevelopment.
The Plaza District building sits at 730 Fifth Avenue on the southwest corner of 57th Street and Fifth Avenue, widely considered to be one of the ritziest retail addresses in America. The re-tenanting of the retail condominium has been a focus since the time of the property’s purchase. Bulgari re-designed its corner location and signed a new 15-year lease near the end of 2015, setting a new city record with a rent of $5,500 according to CityRealty. Other tenants include Piaget and luxury jeweler Mikimoto. Men’s luxury retailer Ermenegildo Zegna opened its flagship store at the building in 2016, as first reported by WWD.
In July, The Real Deal reported that Wharton Properties and Brookfield were in advanced talks to refinance the debt on the retail component with Natixis and Apollo, reporting a $900 million refinance at the time.
Officials at Apollo, Brookfield, Wharton Properties and JLL declined to comment. Appel could not immediately be reached for comment.