JP Morgan Chase Provides $282M SASB Loan on 1325 Avenue of the Americas Office Tower

Rithm Capital is diving headfirst into the capital markets less than a year after making its big purchase of Paramount Group’s office portfolio.

Michael Nierenberg’s Rithm Capital — the $100 billion alternative asset manager — has secured $282.5 million to refinance its interest in 1325 Avenue of the Americas, a 34-story, 825,000-square-foot office building in Midtown Manhattan that was in Paramount’s portfolio. 

Ratings agency KBRA first reported news of the refinancing. 

J.P. Morgan Chase provided the nonrecourse, single-asset, single-borrower (SASB) commercial mortgage-backed securities (CMBS) loan, structured as an interest-only loan with five-year, fixed-rate debt and an interest rate of 6.6 percent, according to KBRA. 

The new debt will pay off a $205 million balance sheet loan also originated by J.P. Morgan and pay down $25.3 million of outstanding gap rent, tenant improvements and closing costs, with Rithm kicking in $4 million of equity.

Located on West 53rd Street in the heart of Manhattan, 1325 Avenue of the Americas opened in 1989 with a distinctive granite and glass exterior that recalled the Art Deco architecture of nearby Rockefeller Center. The building features a landscaped public atrium and a lobby with 27-foot ceiling heights and a gas-burning fireplace. 

Paramount Group spent $41.4 million to retrofit the lobby between 2022 and 2025, per KBRA.

The building is 89.7 percent leased and includes tenants such as McGraw Hill, law firm Olshan Frome Wolosky, the Major League Baseball Players Association and Japanese news organization Nikkei. 

The refinancing follows Nierenberg’s push to alter the business model of Rithm Capital from being merely a publicly traded mortgage-servicing real estate investment trust into a large alternative asset manager. 

As recently as 13 years ago, the firm had $2.7 billion assets under management, but that figure has since grown to $63 billion. Last autumn, Nierenberg beat out SL Green and Vornado to acquire Paramount Group and its 13.8 million-square-foot New York and San Francisco office portfolio for $1.7 billion. This came days after Rithm acquired Crestline, a $17 billion private credit firm.

While the firm is retaining its interest in 1325 Avenue of the Americas, it’s offering a meaty share in a nearby office building: Rithm announced in March it is seeking a joint venture partner in 1301 Avenue of the Americas, a 45-story, 1.75 million-square-foot office tower in Midtown. 

Rithm Capital did not respond to requests for comment 

Brian Pascus can be reached at bpascus@commercialobsesrver.com.