$125M Finances Renovations at Union Square Office Property

The asset consists of two connected office buildings with a total of approximately 625,000 sf of rentable space. The property was built in 1909 as the American Woolen Co.'s output from its New England-based mills. 225 Park Avenue South consists of 19 floors and roughly 474,000 sf; 233 Park Avenue South consists of 12 floors and roughly 150,000 sf.

Orda Management Corp. has owned and managed the property for more than 50 years. It recently completed an approximately $40-million renovation and re-tenanting at the property. The buildings currently serve as the headquarters for the Port Authority of New York and New Jersey, Institutional Investor and International Masters Publishing. In addition, street-level retail includes Chase Manhattan Bank, and two restaurants, Angelo & Maxies and Park Avalon with a third, Ruby Foo's, to be opened soon.

The buildings were also renovated and modernized in the 1980s--converting them from their former warehouse use to office and classroom space. They served as the main campus for Baruch College for the next 20 years.

Mark Cohen, director in the New York office of LJ Melody & Co., arranged the loan on behalf of Orda Management Corp. with the New York State Teachers Retirement System. GEMSA Loan Services LP, an LJ Melody limited partnership affiliate, will service the loan. According to Cohen, the loan was arranged in January 2003 with a fixed-rate commitment from NYSTERS and funded 20 months later in May of this year to avoid "an onerous prepayment penalty"--approximately $7 or $8 million.

John Mechanic and Fran Schreiber of Fried Frank led legal counsel team for the borrower, and Joe Forte and Bill Lippman of Dechert LLP led counsel for the lender.