Independence Plaza Secures $675M CMBS Refi

One of the largest residential buildings in Lower Manhattan has received a new round of financing amid a recovering rental market. 

Vornado Realty Trust and Stellar Management have secured a five-year, $675 million in commercial mortgage-backed securities (CMBS) financing for Independence Plaza, a 1,328-unit multifamily complex that spans three buildings in Manhattan’s trendy Tribeca neighborhood. 

The loan refinances debt that was scheduled to mature in July. Multi-Housing News first reported the deal.  

A consortium of Deutsche Bank, Wells Fargo, Bank of America and Morgan Stanley originated the loan, while Newmark’s Jordan Roeschlaub, Adam Spies, Jonathan Firestone, Nick Scribani and John Caraviello arranged the financing. 

The three buildings that make up Independence Plaza span 1.4 million square feet and are located at 40 Harrison Street, 80 North Moore Street and 310 Greenwich Street in Tribeca.  

Opened in 1975, Independence Plaza had been a rent-regulated apartment under the state’s Mitchell-Lama program, a state-sponsored affordable housing tax abatement, until 2003, when it was purchased by Stellar Management. Today, roughly 40 percent of the units remain rent-regulated or affordable. 

Vornado bought a 58 percent share in the complex in 2012 with an eye toward charging market-rate prices for at least half of the units across the complex. 

The higher rents brought higher values, and in June 2018 the joint venture between Vornado and Stellar secured a seven-year, $675 million loan from Goldman Sachs, securitized into a single-asset mortgage-backed securities deal called Independence Plaza Trust 2018-INDP, as CO reported at the time. 

But the project has lost value in recent years. Crain’s reported that Fitch Ratings found that Cushman & Wakefield has valued Independence Plaza just below $1.2 billion, an 11 percent decrease from its 2018 value. 

About 20 percent of the units within Independence Plaza are defined as Section 8 housing, which receive a majority of rental payments from the federal government and rent at levels 71 percent below market rate, according to an analysis by Fitch Ratings, while another 20 percent are rent regulated by the City of New York. 

Vornado and Stellar have announced plans to build an additional 1 million-square-foot tower that would add another 900 apartments to the complex. The project remains in limbo as the developers navigate the zoning requirements under Mayor Eric Adams’s “City of Yes” housing program. 

Brian Pascus can be reached at bpascus@commercialobserver.com