SL Green Snaps Up $224M Loan on RFR’s 522 Fifth Avenue
The purchase is part of a broader recapitalization with SL Green as RFR begins renovating the building.
By Cathy Cunningham September 4, 2024 11:13 am
reprints
SL Green Realty has purchased the $224 million senior loan on RFR Holding’s 23-story office property at 522 Fifth Avenue, Commercial Observer can first report.
The exact purchase price for the floating-rate, senior note couldn’t be gleaned, but sources familiar with the deal said it traded “at a discount.”
A Newmark (NMRK) team led by Adam Spies, Joshua King, Douglas Harmon, Marcella Fasulo, Adam Doneger and Willis Robbins led the note sale on behalf of the building’s previous lender, Credit Suisse, per an offering memorandum viewed by Commercial Observer.
While the purchase has the potential to put SL Green in the driver’s seat of the property, one source said that the plan is for the two firms to jointly renovate the building into a single-tenant headquarters office tower — which was also its use before RFR purchased it in 2020.
In the past, 522 Fifth Avenue served as a headquarters location for firms including J.P. Morgan Asset Management and Morgan Stanley. Aby Rosen and Michael Fuchs’s RFR bought the building from Morgan Stanley in 2020 for $350 million, but it now sits entirely vacant. The plan is to give 522 Fifth Avenue a makeover for a new, shiny HQ once again.
“RFR is recapitalizing 522 Fifth Avenue with SL Green, which includes purchasing the debt from the previous lenders,” a spokesperson for RFR said. “Renovation work is scheduled to begin this month, and RFR remains enthusiastic about this exciting project.”
SL Green and Newmark didn’t immediately return requests for comment.
The 512,000-square-foot office building is two blocks west of Grand Central Terminal between West 43rd and West 44th streets.
In June, The Real Deal reported that RFR was facing foreclosure on the property after failing to pay the loan off at maturity.
It was a summer of hairy news for RFR. In mid-August, Citibank and J.P. Morgan Chase sought to foreclose on the firm’s $180 million loan tied to 475 Fifth Avenue; a week earlier, Blackstone and Rialto were making moves to foreclose on pieces of the firm’s retail portfolio at One Jackson Square and 219 East 67th Street. And then RFR’s $180 million commercial mortgage-backed securities loan tied to 17 State Street was sent to special servicing after RFR failed to pay up in August.
On the positive side, the firm sold 980 Madison Avenue to Bloomberg Philanthropies for a whopping $560 million in June.
Cathy Cunningham can be reached at ccunningham@commercialobserver.com
