Amalgamated Bank Refis Union Square Office Building With $24M Loan
GFP Real Estate has nabbed a $24 million debt package to refinance its mixed-use asset anchored by Staples in Manhattan’s Union Square neighborhood, Commercial Observer has learned.
Amalgamated Bank provided the five-year, fixed-rate, permanent loan for GFP’s 5-9 Union Square West, sources said. The eight-story building has two floors of retail space occupied by Staples, with office tenants on the higher floors.
Jeff Gural, chairman of GFP, noted that the previous $30 million loan, also originated by Amalgamated Bank, was amortized down to $28 million, and that the company managed to execute the new deal in the higher interest rate environment due to the building’s solid leasing fundamentals.
“If you look at the debt service, we’re now paying debt service on $24 million instead of $30 million, so debt service itself, even though the interest rate went up from 4 percent to 6 and a half percent, it’s not a huge increase,” Gural told CO. “The building is well located and we just renewed the lease with Staples for five years. As a result we were able to get an extension.”
Newmark (NMRK)’s Paul Talbot arranged the transaction. Talbot said in a statement that GFP’s track record and long-term family ownership enabled a “successful refinancing” in a “very difficult lending market.”
Officials at Amalgamated Bank did not immediately return a request for comment.
Staples occupies 21,000 square feet of the 1897-built property, which overlooks the southwest corner of Union Square Park. The largest office tenant is architectural firm Rockwell Group, which Gural said has grown into one of New York City’s top architects working on a number of Broadway sets.
Gural, who owns the Meadowlands Racetrack in East Rutherford, N.J., has also leveraged his connections with MetLife Stadium in the Meadowlands Sports Complex to help boost physical office occupancy at 5-9 Union Square West. GFP runs a contest for every tenant to win suite tickets to MetLife Stadium events including concerts along with Giants and Jets games.
“We have a suite at MetLife Stadium, and we use that as an incentive for people to come to the office because you get an entry into the contest every day that you’re in the office,” Gural said. “It was exciting when we were giving away tickets to Taylor Swift and Beyonce and some of the other great concerts that they had this year. We were typically giving away around 30 tickets to every concert.”
Andrew Coen can be reached at firstname.lastname@example.org