Tishman Speyer $2.8B Refi of The Spiral Earns Rating Agency Approval

Rating agencies are aboard Tishman Speyer’s record $2.85 billion commercial mortgage-backed securities (CMBS) refinancing of The Spiral, a 66-story office tower that opened in 2023 in Manhattan’s Hudson Yards. 

On Friday, Tishman closed on a five-year, fixed-rate, single-asset, single-buyer CMBS loan for the property, supplied by a consortium led by J.P. Morgan Chase and supported by Bank of America (BAC), Goldman Sachs (GS) and Wells Fargo (WFC). 

Upon news of the closing, Morningstar DBRS published a favorable review of the deal’s underlying credit, announcing that ratings of AAA, AA and A would be assigned to its Class A, B and C bonds, while it assigned its Class D, E and F bonds ratings of BBB, BBB and BB, respectively.  

“The Spiral is poised to withstand the issues facing office properties as a result of the rise of remote and hybrid work, as premier companies look to lease space at the highest-quality office properties on the market,” Morningstar said in its report. 

Located at 66 Hudson Boulevard in Hudson Yards at the western edge of Midtown Manhattan, the 2.8 million-square-foot Spiral is 94 percent leased, with TPG Global signing a 301,000-square-foot lease across eight floors in October. CO reported last June that HSBC expanded by 35,400 square feet at the building to over 300,000 square feet, setting an asking rent range between $125 and $225 per square foot. 

Other tenants at The Spiral include law firm Debevoise & Plimpton, investment companies AllianceBernstein and Marshall Wace, and construction services company Turner Construction. 

The strong leasing of high-quality tenants contributed to Morningstar’s AAA rating of the property. 

“Overall, Morningstar DBRS has a favorable view of the credit characteristics of the collateral given its new vintage, tenant amenities, large amount of credit tenancy, and desirable location in an area of Manhattan with great transportation access and a lot of investment,” the firm wrote.  

CO reported last month that the long-awaited CMBS deal, which had been in negotiations for some time, will allow Tishman to pay off a $1.5 billion construction loan supplied by Blackstone Mortgage Trust (BXMT) in 2018, as well as additional mezzanine debt on the property. Underlying debt on The Spiral had been the largest loan in BXMT’s portfolio, as it carried a $1.3 billion balance as late as Sept. 30.

The Real Deal reported this week that proceeds from the CMBS offering will finance tenant reserves and serve as returned equity to Tishman and its investors.

This marks the third large refinancing Tishman Speyer has closed in the last six months. 

Tishman also  secured a $3.5 billion CMBS refinancing for its 7.2 million-square-foot Rockefeller Center office complex in Manhattan, in a deal co-originated by Bank of America and Wells Fargo. Tishman also secured $301 million from Starwood Property Trust in August to refinance a The Wheeler, a 622,000-square-foot, mixed-use office building in Downtown Brooklyn built atop a four-story Art Deco Macy’s department store that opened in 1929. 

Brian Pascus can be reached at bpascus@commercialobserver.com