Deutsche Bank, Barclays to Refinance 1 Park Avenue With $525M CMBS Loan
By Cathy Cunningham February 5, 2021 6:02 pm
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Vornado Realty Trust (VNO) and Canada Pension Plan Investment Board (CPPIB) have locked in a $525 million refinance for their office tower at One Park Avenue, sources confirmed to Commercial Observer.
Deutsche Bank (DB) and Barclays (BCS) will provide the five-year debt, which will be securitized in a single-asset, single-borrower (SASB), commercial mortgage-backed securities (CMBS) deal. CBRE (CBRE)’s James Millon, Tom Traynor and P.J. Finley negotiated the financing, per an offering memorandum reviewed by CO.
The transaction has a loan-to-value ratio of roughly 55 percent.
Sources familiar with the transaction said it’s an optimal time to borrow CMBS debt and sponsorship took advantage of historically low interest rates. In addition to retiring previous debt on the property from 2016, the deal generated significant equity repatriation for the partnership, sources said.
Commercial Mortgage Alert first reported news of the upcoming financing this morning.
The refinance coincides with news that New York University has renewed its lease for the Langone Medical Center at One Park Avenue. On its Nov. 3 earnings call, Vornado announced that NYU would renew 633,000 square feet at the 22-story property, located between East 32nd and East 33rd streets.
In 2018, the hospital and medical center expanded its existing footprint at the property, adding 150,000 square feet to arrive at its current total, which constitutes about two-thirds of the 947,000-square-foot property, as CO reported at the time.
Built in 1925 and designed by York & Sawyer, One Park Avenue includes a gothic lobby with vaulted, 20-foot ceilings. While NYU occupies the majority of its office component, Citibank, Equinox and Zibetto Espresso Bar lease its retail space.
CPPIB owns a 45 percent stake in the asset. It held an 11 percent indirect interest — via a Vornado fund it invested in — up until 2014, before investing additional capital to increase its ownership interest.
Vornado, Barclays, Deutsche Bank and CBRE officials couldn’t be reached for comment late Friday.
