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New-York News

280 Park Ave.'s owners refinance mortgage and pay down debt


SL Green and Vornado Realty Trust scored a big win Wednesday morning when they unveiled the long-awaited refinancing of 280 Park Ave.’s mortgage.

The new $1.075 billion loan matures in 2026, with a potential two-year extension, the co-owners said, and carries the same floating 7% interest rate as the mortgage that matures in September. 280 Park is a 1.3 million square-foot, 43-story tower at the corner of East 48th Street.

In addition to refinancing the mortgage, SL Green and Vornado lowered the building’s debt burden by paying off a $125 million mezzanine loan for just $62.5 million. The gain from extinguishing the debt should give a boost to both landlords when they report quarterly financial results. SL Green is to report tonight.

Lenders for the new mortgage weren’t disclosed. The banks that wrote the current loan were Deutsche Bank, Goldman Sachs, Barclays, and Citigroup.

280 Park houses several financial tenants, including money manager Franklin Templeton and Singapore’s sovereign wealth fund. Several large tenants have moved out in the past year, including asset managers Cohen & Steers, Blue Mountain Capital, and Viking Global Investors, and cash flow fell 10%, KBRA said in a report last year. The decline raised questions on whether lenders would demand stricter terms for the new mortgage. 

But last December restructuring specialist PJT Partners helped relieve the pressure by agreeing to double its footprint in the building to 270,000 square feet.

Evercore ISI analyst Steve Sakwa described the refinancing as “a favorable resolution.” 

Shares in SL Green and Vornado each rose by about 2% in midday trading.



Aaron Elstein , 2024-04-17 18:05:25

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