$1.1B Financing Deal
Commercial Observer
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The owner of one of the country’s more prominent office buildings secured a $1.1 billion refinancing package. It’s quite a notable feat given the frigid lending climate for office properties at the moment. Also for today, a new report paints a very grim picture of commercial real estate loans in 2024.
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— Tom Acitelli, Deputy Editor
RFR Seals $1.1B Refi for 375 Park Avenue
RFR Holding's Aby Rosen has secured a $1.1 billion refinancing for the firm’s Seagram Building at 375 Park Avenue, Commercial Observer has learned. The recapitalization replaces the property’s $789 million senior commercial mortgage-backed securities loan and includes between $350 million and $360 million in fresh equity from JVP Management, a company run by Anthony Shaskus, which is also the mezzanine lender, according to a source with knowledge of the deal. The asset’s original senior loan was closed in 2013 through Citigroup and then extended in May to facilitate more time for refinancing negotiations amid the difficult capital markets environment, according to property records and the source.
Nearly Half of Office Loans Now Risk Default: Report
The outlook is ugly, and the numbers are even uglier. A new paper from four economists at the National Bureau of Economic Research argues that 14 percent of the $2.7 trillion commercial real estate loan market — and 44 percent of office loans — currently carry outstanding loan balances higher than property values and are at risk of immediate default. The paper also calculated that a 10 percent default rate on all CRE loans could trigger up to $80 billion in bank losses and dozens of potential bank failures. On the brighter side, however, the authors argued interest rate declines engineered by the Federal Reserve could stave off further distress.
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