The Biggest Financings of the COVID-19 Era
One could practically hear Wall Street exhale less than two months into the lockdown, when Oxford Properties and the Canadian Pension Plan Investment Board received the $972.6 million in construction financing from Wells Fargo (WFC), TD Bank, JPMorgan Chase (JPM) and four other banks to complete the redevelopment St. John’s Terminal in Manhattan.
Of course, in January 2020, when Commercial Observer first reported that a deal was afoot, every bank worth its salt was “fighting to get a piece” of it. And why wouldn’t they? The 1.3 million-square-foot project had already secured Google as its tenant. There is no bluer chip firm to rent to nowadays.
But, by May, closing something quite that big offered great reassurance. The project’s completion was still a long way off, and the money people had made the calculation that the pandemic would eventually end, and that such deals of roughly $1 billion or more could continue.
Later that May, the first conduit transaction of the COVID era was born, with a $772 million CMBS deal (2020-GC47) arranged by Citigroup (C) that consisted of 29 commercial mortgage loans secured by 60 properties.
Deals of that level ($700 million to $900 million) also continued, slowly but steadily, throughout the last year.
In June, Goldman Sachs (GS) and Barclays loaned Blackstone $900 million for the purchase of a 49 percent stake in Hudson Pacific Partners’ Hollywood Media Portfolio. (Movie studios in general were an attractive asset; apparently, keeping people homebound, drove demand for content. In September, Hackman Capital Partners and Square Mile Capital Management grabbed $323 million in financing from funds affiliated with Apollo Global Management and Deutsche Bank to purchase Silvercup Studios in Astoria, Queens.)
While the big office acquisition was understandably rare, there were some notable office refinancings.
Brookfield Property Partners and The Swig Company retired some $900 million in CMBS debt with $1.25 billion from Bank of America, JPMorgan Chase, Credit Suisse and Deutsche Bank on the Grace Building, the 49-story curved tower on the northern side of Bryant Park.
On the West Coast, Fortress Development in April 2021 got a $700 million construction loan from Silverstein Capital Partners (the lending arm of Larry Silverstein’s Silverstein Properties) for development of the 1.1. million-square-foot Avenue Bellevue, a mixed-use project in Bellevue, Wash.
Also last month, Goldman Sachs, JPMorgan Chase, Deutsche Bank and Athene Annuity & Life Company loaned Bay Area developer Kylli $750 million to refinance Burlingame Point, an 18-acre campus leased to Facebook subsidiary Oculus.
But the biggest financing of the pandemic has not happened yet. At the end of April, The Real Deal reported that Goldman Sachs and Wells Fargo are leading an estimated $2.25 billion refinancing of SL Green Realty’s Midtown jewel, One Vanderbilt.
If that goes off without a hitch (the completion is expected to be in June), it will be one of the largest refinancings for a single building ever, and will prove that an economy and a city ravaged by the worst of a once-in-a-century plague is still plenty resilient.