As it Continues Repositioning, 575 Lexington Secures $415M Refinance
Cushman & Wakefield Arranges Floating-Rate Loan Provided by Paramount Group’s Fund VIII
New York City's 2018 refinancing wave is underway.
The office building at 575 Lexington Avenue has become the latest Manhattan office building to garner refinancing, with building ownership securing a $415 million floating-rate loan through a fund created by the Paramount Group's Paramount Fund VIII, which the group closed in May 2016 with $775 million in commitments, largely from German institutional investors.
The 739,040-square-foot property is owned by Angelo Gordon & Co., Normandy Real Estate Partners and George Comfort & Sons, and has undergone significant upgrade work since 2017.
Ownership has already invested about $25.9 million into a full renovation of the lobby, entrance, elevators and mechanical systems. This year, about $26.2 million in capital improvements is underway.
"The Owner’s business plan has been well-received by the leasing market and the additional capital program will finish off the asset’s repositioning nicely," said Alex Hernandez, executive director of Cushman & Wakefield’s equity, debt and structured finance team. The group worked with the capital markets team at Cushman & Wakefield as advisors in the deal.
"The transitional financing market continues to improve for high-quality assets and sponsors," noted Steve Kohn, president of equity, debt and structured finance at Cushman & Wakefield.
Prior to these improvements, the steel Plaza District building, built in 1958, was last renovated in 1990. It stands about 86 percent leased, having recently closed on 10 leases totaling almost 87,000 square feet. Anchor tenants include Weill Cornell Medical College with over 156,000 square feet, and law firm Boies Schiller & Flexner LLP with 106,000 square feet. About 3 percent of the building’s footprint, or 22,171 square feet, is designated retail with tenants including New York Sports Club, Maison Kayser and Duane Reade.
For the Record: In addition to Kohn and Hernandez, the Cushman & Wakefield teams representing the borrower included Noble Carpenter, Dave Karson, Gideon Gil, Alex Lapidus and Adam Spies.