SL Green Lands $1.4B CMBS Deal for 11 Madison Avenue

The commercial mortgage-backed securities (CMBS) single-borrower office market is heating up.

SL Green Realty and its joint venture partner PGIM Real Estate sealed a $1.4 billion refinancing for 11 Madison Avenue, a 30-story Midtown South office tower anchored by UBS, Sony Music and Pinterest, the company announced Monday. 

Wells Fargo was the lead underwriter for five-year, fixed-rate CMBS deal with participation from J.P. Morgan Chase, Bank of America, Goldman Sachs, Deutsche Bank and Bank of Montreal. The deal carried a coupon rate of 5.625 percent that the borrowers hedged to 5.592 percent, according to SL Green. 

The transaction replaces $1.4 billion of prior debt. It closed amid Brookfield lining up a $985 million CMBS loan as part of a $1.2 billion refi for its Five Manhasset West building, which is leased to J.P. Morgan and Amazon.

“This loan execution underscores our deep relationships with the lending community and the enduring strength of premier office assets,” Harrison Sitomer, chief investment officer at SL Green, said in a statement. “The strong demand from global institutional bond investors resulted in one of the most successful CMBS executions in years, which is reflective of the exceptional quality of 11 Madison Avenue and the confidence investors continue to place in our platform.”

CoStar was first to report that SL Green and PGIM landed the CMBS financing.

Located between 24th and 25th streets adjacent to Madison Square Park, 11 Madison Avenue is 93 percent leased, according to SL Green. The building recently added health technology company Tempus AI, which signed a 10-year lease for 39,565 square feet last month. Other tenants at the 2.3 million-square-foot office building include William Morris Endeavor, Suntory and Fidelity. 

The deal was arranged by CBRE brokers Tom Traynor, Tom Rugg and Henry Fenmore along with a Newmark team of Jordan Roeschlaub, Nick Scribani and John Caraviello. 

“This refinancing reflects the strength of New York’s office market when it comes to Class A, well-located assets that continue to attract tenants and capital,” Joanna Mulford, managing director and senior portfolio manager of PGIM’s real estate business, said in a statement. “We are pleased that our sponsorship along with the strength of the asset and partnership generated what we view as one of the most favorable executions for office debt today.”

Wells Fargo declined to comment. 

Andrew Coen can be reached at acoen@commercialobserver.com