Sumitomo Mitsui Trust Bank Lends $911M on Citadel-Leased 425 Park
By Andrew Coen April 11, 2024 1:35 pm
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Higher interest rates and hybrid working trends did not prevent one of Manhattan’s biggest office owners from nabbing one of the year’s largest commercial real estate loans.
L&L Holding Company has secured a $911 million loan to refinance its newly opened Midtown East office tower anchored by Ken Griffin’s hedge fund company Citadel, the developer announced Thursday.
Sumitomo Mitsui Trust Bank served as lead lender and administrative agent for the five-year, floating-rate loan on 425 Park Avenue, a 47-story skyscraper that L&L opened in late 2022 with partners, Tokyu Land U.S. Corporation and BGO.
Loan proceeds will be used to retire a previous $911 million loan from Blackstone in 2021 that funded final construction and lease-up of the 670,000-square-foot building, which was the first full-block office development to be built on Park Avenue in more than a half century.
The financing was first reported by Bloomberg.
The Park Avenue property is now 90 percent leased with Citadel the largest tenant, comprising 440,000 square feet on 22 floors, according to L&L. Griffin inked a deal in 2022 to have Citadel lease the top two floors of the tower for $300 a square foot, Bloomberg previously reported.
“This massive loan package demonstrates the lending market’s continued capacity and appetite to finance ultra-premium, highly amenitized and well-located office towers owned and operated by first-rate sponsors,” Rob Lapidus, president and chief investment officer of L&L, said in a statement.
L&L mapped out plans for 425 Park for over a decade after entering into a ground lease with Lehman Brothers in 2006 before acquiring full redevelopment control of the site in 2013. L&L and BGO (then GreenOak Real Estate) obtained $556 million of construction financing in 2015 from Massachusetts Mutual Life Insurance Company to commence work on the tower.
Officials at Sumitomo Mitsui Trust Bank did not immediately return a request for comment
Andrew Coen can be reached at acoen@comercialobserver.com
