JPMorgan Chase, Citigroup, Goldman Sachs and Bank of Montreal have teamed up to create a debt of $ 950 million in order to refinance Vornado Real Estate Trust and Donald trumpmidtown skyscrapers at 1290 Avenue of the Americas, according to the rating agency’s analysis of the case.
Months after Vornado would have wanted buy out Trump’s 30% stake in the 43-story asset, following the end of their presidency and the attempted insurrection of January 6, the duo landed a long-awaited refinancing, Bloomberg reported, citing data recently published by Kroll Bond Rating Agency (KBRA).
JPMorgan Chase withdrew about $ 475 million, or half, from commercial mortgage-backed securities (CMBS) lending, while Citi real estate financing and Goldman Sachs each generated 20 percent of the total and Bank of Montreal provided the remaining 10 percent, according to KBRA. The deal is expected to be finalized on November 17.
The CMBS loan, along with $ 61.6 million in sponsors’ equity, removed $ 950 million of existing on-balance sheet debt held by Wells fargo, according to KBRA. The Class A asset once pledged an older 2012 $ 950 million single-borrower CMBS securitization – VNDO 2012-6AVE – but this debt was later refinanced from CMBS by the Wells Fargo on-balance sheet loan, per KBRA.
It is the second office skyscraper that Vornado and Trump have refinanced in recent months, having already secured a $ 1.2 billion loan on the 55-story tower in 55 California Street in San Francisco under an agreement also led by JPMorgan. Vornado and Trump were able to recover around $ 617 million in equity in this deal, providing liquidity against Trump growing debt burden.
Trump owns a 30 percent interest in both 1290 Avenue of the Americas and 555 California Street, which together represent about a third of his fortune of about $ 2.3 billion, according to previous Bloomberg reports. Vornado controls the remaining 70% interest in both properties. The publicly traded real estate investment trust led by Steven roth purchased 1290 Avenue of the Americas in 2007.
Built in 1963, the 2.1 million square foot Midtown Tower – between West 51st and West 52nd streets – has received approximately $ 270 million since 2010 for lobby and common areas renovations, building upgrades and its mechanical systems, as well as for rental and leasehold improvements, according to KBRA.
As of this month, the property is 98% leased to a list of 25 tenants. The biggest tenant is AXA Equitable Life Insurance Company, which occupies nearly 23% of the total building area. Other tenants include an investment management company Neuberger Berman, global consulting company Cushman and Wakefield, international law firm Venable and Hachette Book Group Inc. These five companies account for nearly 67% of base rent and occupy about 65% of the total area of the asset, according to KBRA.
Last month, it was reported that Venable, headquartered in Washington, DC, signed an agreement for move from 1290 avenue des Amériques, with plans to move its operations from New York to 157,800 square feet at Durst organization‘s one five one – formerly the Condé Nast building – To 151, 42nd Street West.
Mack Burke can be contacted at [email protected].