Silverstein Properties Closes $510M Refi for 120 Broadway
Silverstein Properties and UBS Realty Investors closed a $510 million refinance for their 2-million-square-foot office and retail property.
Despite the market volatility that has become the temporary new normal on the heels of the coronavirus pandemic, substantial deals continue to close — underscoring the fact that capital continues to flow to certain assets.
Wells Fargo (WFC) led the financing, $410 million of which is fixed rate and $100 million is floating rate. Bank of New York and U.S. Bank are also participants in the refinance, sources said.
Cushman & Wakefield (CWK)’s Steve Kohn, Alex Hernandez, Alex Lapidus and Meredith Donovan negotiated the debt on behalf of Silverstein and UBS.
The financing retires and upsizes a $310 million CMBS loan from 2013 — also provided by Wells Fargo — which was due to mature this month.
“We ran a process with Cushman & Wakefield that was very competitive — all the banks participated,” Silverstein Properties CEO Marty Burger told CO today. The debt opportunity attracted a mixed set of financiers, Burger said, with life companies and banks — split between their CMBS shops and balance sheet businesses — stepping up to compete.
“We chose Wells Fargo for a number of reasons: They were the existing lender, we have a long-standing relationship with them and they offered the best terms,” Burger said. “They were also willing to bring in some other banks as participants, so we got to include them in the transaction.”
In the midst of all the mayhem that was going on, the deal closed right on time — and on Friday the 13th, of all days.
“Wells Fargo lived up to their side of the deal. We closed as per the term sheet and as per the documents and there were no re-trades in the middle of a crazy market,” Burger said. “So, hats off to Wells for viewing us as a good, sophisticated client and keeping their word in getting this deal done in a market where there were many wild re-trades happening.”
Wells Fargo’s Rob Rosenberg, a senior commercial mortgage originator at the bank, led the deal on behalf of the lender.
“We are pleased to continue our great relationship with Silverstein Partners on this commercial property, a strong fixture of New York’s financial district,” Rosenberg said.
Silverstein and UBS were able to fix a $410 million portion of the loan at under 2 percent, and the other $100 million, which will be spent on tenant improvement costs and leasing commissions and additional capital expenditures on the building, floats at LIBOR plus 140.
Silverstein recently completed a $50 million renovation of the 105-year-old Beaux Arts tower, which sits between Pine and Cedar Streets, a stone’s throw from Silverstein’s World Trade Center properties. The work included a restoration of the gold-leaf lobby, a revamp of the top-floor Banker’s Club into a rooftop terrace with a restaurant and cocktail bar, and updates to the lobby and retail spaces.
“The Silverstein and UBS team has done a remarkable job refurbishing this iconic office asset to its original grandeur and as a result, successfully leasing-up office and retail spaces,” C&W Vice Chairman Kohn said in prepared remarks.
“We upsized the loan to pay off the money we used for renovations plus we had dipped down below 80 percent in our occupancy, into the 70s and we were just starting to re-lease the building so we had tenant improvement costs and leasing commissions for new tenants coming in,” Burger said. “We’re trying to be in the mid-90s and we’re on our way to getting there.”
The 40-story landmark asset is a stone’s throw away from Silverstein’s World Trade Center. Its office tenants include Macmillan Holdings — which moved to 120 Broadway last year after spending 60 years as the sole tenant in the Flatiron Building, the Department of City Planning and Thornton Tomassetti ,while its retail space is occupied in part by Capital Grille and Citibank.
“Lenders were highly attracted to the landmarked asset and the successes that have already been achieved following the transformative capital investment,” C&W managing director Hernandez added. “This will enable the Silverstein and UBS team to complete the final phases of the capital/leasing program, allowing 120 Broadway to continue its position as the preeminent pre-war office building in lower Manhattan.”