Irvine Co. Closing in on $1.5B Refinancing of MetLife Building

The California-based owner of the famed MetLife Building could be in two states of mind: giddy over refinancing the property or bereft over the sharp increase in the interest rate.

The Irvine Company is close to refinancing the property at 200 Park Avenue in Midtown Manhattan with a $1.5 billion loan, Crain’s reported. The refinancing is expected to close on Feb. 10, according to KBRA.

The loan would carry an interest rate of 6.25 percent over 10 years. That’s a sizable jump from the 3.6 percent interest rate Donald Bren’s firm previously faced and the debt-serving costs will double to approximately $100 million a year.

The 58-story, 3 million-square-foot building is 94 percent occupied and generates $170 million in net operating income. Ownership, which included Tishman Speyer until it was bought out last year for an unknown price, has invested $180 million in the property dating back to the year before the pandemic. Updates have included a redesigned lobby and improved connections with Grand Central Terminal.

In 2023, the Irish government leased 43,000 square feet at the MetLife Building, planning to relocate elsewhere from Park Avenue the following year.

Irvine and Tishman acquired the building in 2005 for $1.7 billion. It’s the only New York holding for Irvine, which recently paid off its $431 million balance for a prominent commercial property in Chicago’s River North, positioning the 60-story property at 300 North LaSalle Street to compete for tenants.

Irvine’s elevated interest rate is indicative of where the mortgage environment has drifted in recent years. Elsewhere in Manhattan, SL Green’s interest rate at the Graybar Building increased from 3.8 percent to 8.1 percent following a long-term extension, while Steven Roth’s interest rate for Bloomberg Tower jumped from 1.1 percent to 5 percent after he secured a $400 million mortgage.

— Holden Walter-Warner