The numbers don’t lie — 2023 was a tough year to find debt.
Rates kept rising and lending markets tightened, pushing developers with projects in the pipeline to the sidelines and office owners with extensions at their disposal to kick that can.
New York’s 10 largest financing deals totaled $5.4 billion in 2023, a far cry from the $8 billion recorded in 2022.
In 2021, the city’s top five loans alone amounted to $7.2 billion.
The refinancings that comprise the bulk of this year’s biggest deals are a testament to hard work and deep pockets. Several office landlords — Aby Rosen’s RFR and Scott Rechler’s RXR among them — drummed up fresh equity to secure new terms and push out maturity dates.
Here’s a look at this year’s largest debt deals:
1) Aby Rosen’s Recap | $1.1B
After toiling away for the better part of 2023, RFR Holding finally locked down refinancing for the Seagram Building two weeks before the new year.
Aby Rosen’s RFR landed $1.1 billion to recapitalize the Midtown office property at 375 Park Avenue. The deal replaced a $789 million securitized senior mortgage that matured in May and included $350 to $360 million in fresh equity from JVP Management, the mezzanine lender on the property.
RFR had nabbed a one-year extension on the debt this spring, likely to buy time to refinance.
2) RXR’s equity injection | $980M
RXR got honest with itself about the office market this year. In February, CEO Scott Rechler said the firm had separated the has-beens from the buildings worth investing in, when news broke it planned to hand back the keys on two of its properties.
1285 Sixth Avenue apparently made the cut. In October, RXR negotiated a modification on the office tower’s $1.2 billion loan, tossing in another $220 million of equity to stock reserves and pay down the loan’s principal balance to $980 million. The negotiated terms pushed out maturity by 5 years and bumped up the interest rate to 6 percent from the original 4 percent.
3) Queens construction | $725M
Heading off the four additional interest rate hikes of 2023, developer TF Cornerstone in January secured a $725 million loan to finance construction on a two-building rental project in Hunters Point, Queens.
Wells Fargo took the lead, giving a $418 million loan that TF Cornerstone will tap to fund 2-21 Malt Drive, an 811-unit tower. PNC Bank led a $307 million loan that will finance 2-20 Malt Drive will hold 575 units.
Malt Drive is a road in the works — a privately owned, publicly accessible street set to connect the two buildings when construction wraps.
4) “Incredibly hard” refi | $500M
The existential threat to office buildings made for a tricky refinancing of Midtown’s 919 Third Avenue. But owner SL Green persisted, securing $500 million in debt.
A six bank syndicate led by Credit Agricole and Aareal Bank drummed up the funds for a three-year loan with two one-year extension options, a deal that was “incredibly hard” to finalize, according to the Commercial Observer.
SL Green signed on for an interest rate 2.5 percentage points above term SOFR — an index often used for floating-rate loans. 919 Third Avenue is 80 percent leased, according to SL Green. Bloomberg is among its largest tenants.
5) Patience in Midtown | $485M
Tishman Speyer in June nabbed an extension on the $485 million loan backed by Midtown office tower 300 Park Avenue.
Tishman pushed the August 2023 maturity on the CMBS loan to August 2024 and secured a one-year extension option. The firm struggled with vacancies throughout the pandemic as occupancy dipped to 75 percent in 2020 from 99 percent in 2018. Ultimately tenants flocked back, boosting occupancy to 97 percent as of summer 2023.
6) 11th-hour 421a play | $425M
Developer BLDG Management scored $425 million to finance construction of a 69-story rental tower set to join the ranks of Long Island City’s high-rises.
The so-called Orchard at 42-02 Orchard Street is expected to qualify for the 421a tax abatement, a city program that requires developers to set aside a certain number of units as affordable.
The abatement expired in June 2022. To qualify, developers who got pilings in the ground before that sunset date must complete work by June 2026. BLDG’s ballparked completion date is 2026, according to New York Yimby.
7) Retail Restructuring | $355M
Vornado Realty Trust closed out 2022 with a whimper on Fifth Avenue. The REIT, through its joint venture with Crown Acquisitions and the Qatar Investment Authority, defaulted on a $450 million loan backed by two properties — The St. Regis Hotel at 2 East 55th Street and its retail front at 697 Fifth Avenue — when the debt matured last December.
The loans were “not refinanceable,” Vornado CFO Michael Franco said on a fourth-quarter 2022 earnings call. The group was pushing to restructure, Franco added, but could be forced to hand over the keys.
Six months later, the team hashed out a negotiation that included a near-$100 million pay down.
Credit Agricole is the lender on the new $355 million loan.
8) Full occupancy, fresh financing | $330M
Tishman Speyer and Silverstein Properties scored $330 million to refinance the so-called Salmon Tower this summer, heading off a June maturity. The Bryant Park office building’s 99 percent occupancy rate likely eased the process.
A group that included Bank of America and UBS loaned $275 million and Taconic Capital Advisors doled out $56 million in mezzanine debt. The fresh debt replaced a $300 million CMBS loan originated by Goldman Sachs Mortgage.
Read more
Commercial
New York
New York City’s biggest borrowers of 2022
Commercial
New York
Here are NYC’s largest commercial real estate finance deals of 2021
Commercial
New York
Nervous lenders retreat in NYC
9) Lincoln Square lender | $263M
Multifamily investor The Dermot Company, in partnership with Affinius Capital and PGGM, nabbed $263 million to refinance a Lincoln Square apartment building at 101 West End Avenue.
The fresh financing replaces a $260 million acquisition loan that the Dermot group used to purchase the property from Sam Zell’s Equity Residential in 2018.
10) So-long Signature Bank | $252M
Cammeby’s International Group and Rybak Development scored a quarter of a billion dollars to finance the construction of a multifamily complex in Coney Island. The three-building structure is set to rise at 532 Neptune Avenue and hold 499 units, 30 percent of them affordable, plus 40,000 square feet of retail.
The construction financing replaces debt previously held by Signature Bank, which collapsed in March.