Lightstone Lands 10-Year Refi on 1407 B'way

NEW YORK CITY-The Lightstone Group and Lightstone Value Plus REIT Inc. said Tuesday that they'd closed on a loan extension with Swedbank AB for 1407 Broadway, a 1.1-million-square-foot Garment District icon located between 38th and 39th streets.  The $127-million loan has been extended by 10 years and the interest rate has been modified. Terms were not disclosed.

Lightstone and LVPR are committing $13.5 million to upgrade 1407 Broadway, with an eye toward repositioning it toward the technology, media and creative industries. With vacancy in Midtown South the lowest in the US, the tenants are looking north as well as south of Chelsea and the Flatiron District.

The repositioning goes back to the original plan for the 61-year-old 1407 Broadway, which Lightstone acquired in January 2007 for $122 million. “The original intention was to convert to an office building and either relocate garment to a lower portion of the building or relocate it altogether,” Grant Greenspan, a principal at the Kaufman Organization, told the Commercial Observer in 2009. Greenspan was hired to broaden the property's base of fashion industry tenants. 

Capital improvements will include upgrades to the infrastructure and systems such as HVAC and electrical, along with renovations of the main lobby, floor-by-floor common areas and street level retail storefronts, according to a release. Plans also call for the installation of enhanced technology systems such as telecommunications risers, high speed Internet, and a transfer system for large amounts of data. In addition, the 13,000- square-foot floor plates of 1407 Broadway's Tower, floors 23 through 42, will be built out to meet the needs of contemporary office tenants.

“We believe this repositioning is representative of the Lightstone Group's ability to identify attractive investment opportunities which are well-positioned and have the ability to grow,” says David Lichtenstein, chairman and and CEO of Lightstone as well as LVPR, in the release. “We believe the location of this iconic property, coupled with our planned $13.5-million renovation, is key to its success.”

Further, Lichtensein cites “the recent transformation of Broadway in Midtown into an active office corridor. This gives us the opportunity to reposition 1407 Broadway for the tech, media and creative businesses that are moving north. We are especially thrilled to be making significant capital improvements to the Tower which will offer unique size category that is exclusive to 1407 Broadway. These entire tower floors offer panoramic views of New York Harbor, the Empire State and Chrysler Buildings; additionally the building is in close proximity to major transportation hubs.”