Aareal Capital, Paramount, Oaktree Provide $415M Refi for 575 Lexington Avenue
By Cathy Cunningham March 22, 2021 11:48 am
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Angelo, Gordon & Co., George Comfort & Sons and Columbia Property Trust have closed a $415 million refinance for 575 Lexington Avenue, sources familiar with the transaction told Commercial Observer.
The floating-rate loan was provided by affiliates of Aareal Capital Corporation, Paramount Group and Oaktree (OAK-A) Capital Management and negotiated by Cushman & Wakefield (CWK)’s Adam Spies, Steve Kohn, Adam Doneger, Alex Hernandez and Alex Lapidus, sources said.
Officials at Paramount and Oaktree didn’t immediately return requests for comment. Aareal officials couldn’t be reached. A spokesperson for C&W declined to comment.
The 746,280-square-foot, Class A office asset is located between 51st and 52nd streets and boasts panoramic views of the Manhattan skyline. Built in 1958, the Sylvan & Robert Bien-designed, 35-story tower is 85 percent leased to a solid tenant roster, including anchor tenant Cornell University. Building amenities include two levels of below-grade parking, a New York Sports Club on the second floor, and a Maison Kayser on the ground floor.
Last month, Hertz Herson announced it would move its offices within Midtown to 575 Lexington Avenue, as reported by CO. The accounting firm signed a 12-year lease for 9,763 square feet on the entire 34th floor.
Normandy Real Estate Partners — prior to its acquisition by Columbia Property Trust — acquired the 1950s-era property alongside investor New York Life Insurance Company, for $360 million in October 2012, according to data from CoStar Group. A recap in August 2015 saw the exit of New York Life and the entrance of Angelo Gordon and George Comfort & Sons. Today, ownership comprises Angelo Gordon, George Comfort and a fund advised by CREM, a subsidiary of Columbia Property Trust.
In recent years, ownership has invested roughly $40 million in the renovation of the property, including its lobby, elevators, mechanical systems and pre-built suites.
The owners had explored a potential sale of the asset back in January 2020, as first reported by CO. Its refinance is one of the largest office financings to close post-COVID.
Earlier this month, Oaktree also teamed up with J.P. Morgan to finance CIM Group‘s 1440 Broadway, with Oaktree holding the $100 million B-note in the $400 million deal.
And Paramount Group is no stranger to 575 Lexington Avenue. Its Paramount Group Real Estate Fund VIII provided a $415 million refinance for the asset back in 2018, in a transaction that was also arranged by the C&W team, as first reported by CO.
Officials at Columbia Property Trust and George Comfort & Sons weren’t immediately available for comment. Angelo Gordon officials couldn’t immediately be reached.
