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Crown Building retail owners in talks with Natixis, Apollo, for $900M refi

Wharton Properties and Brookfield have signed a term sheet with Natixis and Apollo Global Management

The Crown Building and Jeff Sutton
The Crown Building and Jeff Sutton

The owners of the commercial component of the Crown Building are in advanced talks with a pair of lenders to refinance the prized Fifth Avenue property.

Jeff Sutton’s Wharton Properties and Brookfield Asset Management have signed a term sheet with French lender Natixis and Apollo Global Management for a $900 million loan to refinance the 92,000-square-foot retail condominium at the building, people with knowledge of the discussions told The Real Deal.

The new loan would refinance $720 million in debt backing the property after Wharton and Brookfield bifurcated the retail portion of the building and the floors above.

Wharton teamed up with General Growth Properties (which has since been acquired by Brookfield) in 2015 to purchase the 390,000-square-foot Crown Building at 730 Fifth Avenue for $1.8 billion from Eliot Spitzer’s Spitzer Enterprises.

To finance the acquisition, a Deutsche Bank-led syndicate provided a $1.3 billion loan. Sutton and GGP then sold the building’s upper 20 floors for $500 million to developers Michael Shvo and Vladislav Doronin, who planned to create an Aman Hotel and 23 condominiums. The luxury development is still ongoing, however Michael Shvo is no longer involved in the day-to-day construction (he says he still has equity in the project).

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The Deutsche Bank debt was reportedly modified last year, and $720 million was set aside for the retail portion, Commercial Mortgage Alert reported in April.

The building’s retail portion is currently anchored by fashion house Bulgari, which signed a 15-year lease for a 3,000-square-foot space. Priced at $5,500 a square foot, the deal was a city record at the time. Other tenants include Mikimoto and Piaget.

A JLL team led by Aaron Appel is representing the building’s owners for the financing.

Sutton declined to comment. Representatives for Brookfield, Apollo and Natixis did not immediately respond to a request for comment.

Further down the street, Brookfield last year signed an agreement with Apollo for $300 million mezzanine loan at 666 Fifth Avenue.

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