575 Lexington Ave. Gets $415M in Refinancing

NEW YORK CITY—A joint venture of Angelo Gordon & Co, Normandy Real Estate Partners and George Comfort & Sons received $415 million of floating-rate financing for 575 Lexington Ave., secured by the property. Paramount Group Inc.’s Paramount Fund VIII provided the loan.

The 35-story, 744,445 square-foot office tower is located on Lexington Avenue between E. 51st and E. 52nd streets in Midtown Manhattan. The property, also referred to as the Grolier Building, is currently 86% leased. Current office tenants include Weill Cornell Medical College and the law firm Boies Schiller, according to Real Capital Analytics. Retail tenants include New York Sports Club, Maison Kayser and Duane Read.

A Cushman & Wakefield equity, debt and structured finance team of Steve Kohn, Alex Hernandez, Dave Karson, Gideon Gil, Alex Lapidus and Noble Carpenter, along with Adam Spies of Cushman & Wakefield capital markets represented the borrower in arranging the loan.

“The transitional financing market continues to improve for high-quality assets and sponsors,” says Kohn. Hernandez adds, “The owner’s business plan has been well-received by the leasing market and the additional capital program will finish off the asset’s repositioning nicely.”

The owners have maintained the property, originally constructed in 1958, through investments in base building capital, tenant improvements and leasing capital. Renovations of $25.9 million have focused on updating the main entrance, lobby and elevators and replacing many of the building’s mechanical systems. A $26.2 million capital plan, budgeted for 2018 alone, is currently underway.