The new refinancing deal for the office trophy tower, One Congress, by Carr Properties and its joint venture partner, National Real Estate Advisors, is important beyond the immediate reach of downtown Boston. It is also more than one million square feet, featuring a 15,000-square-foot rooftop, fitness center, coffee bar, amenity center, triple-height lobby and dual water views of Boston Harbor and the Charles River.
What makes this deal especially notable is the $650 million single-asset, single-borrower loan arranged by JLL and financed by Wells Fargo and Bank of America.
That continues on the widespread belief that 2025 could be the year of the SASB deal, which started to become clear in early January. That's when Tishman Speyer and Henry Crown closed $2.65 billion in commercial mortgage-backed security support to refinance The Spiral, a prominent New York City office tower. The top tranche had a coupon rate of 5.47%, with an additional $200 million in debt to be securitized in future deals, resulting in a total financing of $2.85 billion.
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Q1 2025 CMBS issuance increased 21.7% from the previous quarter, with SASB transactions being one of the main drivers of the increase, along with a rebound in conduit deals. The SASB transactions accounted for 72.12% of all issuance, totaling $27.08 billion across 30 deals, out of a total of $37.55 billion across 40 deals. This represented a significant jump from last year’s 68.29% share and 16 transactions totaling $17.85 billion, reflecting the market’s growing preference for SASB structures.
"SASB lenders typically look for top-quality assets with reputable borrowers, both of which One Congress had,” said Riaz Cassum, one of JLL's executive managing directors, who worked the deal on behalf of the JV. “The Carr and National partnership delivered an office asset that has redefined the trophy office landscape in Boston."
Not to pretend that nothing could go wrong. In the fall of 2024, numerous top-rated SASB CMBS deals went sour.
Roughly a year ago, investors in the AAA tranche of the $308 million debt backed by 1740 Broadway in midtown Manhattan only got 74% of their investment back after the loan sold at a steep discount. Bloomberg analyzed 150 SASB bonds tied to office properties.
That included 1407 Broadway, again a Manhattan, 43-story tower with a roster of solid corporate tenants that ended up in foreclosure. Or Chicago’s River North Point, with the A tranche 28% underwater and 555 W. 5th St., Los Angeles, as 51% of the A tranche was in trouble.
It's possible that 2024 was a particularly challenging year. As a Moody’s analysis noted, delinquency rates continued to increase monthly through last year, driven by high interest rates, a significant percentage of maturities, slowing property revenue growth, and a slow recovery for office properties.
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