NEW YORK CITY-The Bromley Cos. has closed on a 30-year, $48.4-million refinancing of its office property at 122 Fifth Ave., GlobeSt.com has exclusively learned. Aaron Appel, a managing director at Meridian Capital Group, arranged the financing with First Republic Bank.
The 236,000-square-foot office tower is fully occupied, with Barnes & Noble's corporate offices occupying the lion's share of office space. “This was a unique and opportunistic moment to improve the building's capital structure,” says Nicholas Haines, Bromley's CEO. “We reduced our borrowing costs by more than 200 basis points and were able to obtain a 30-year loan with significant flexibility.”
The refinancing monetizes, on a tax-favored basis, some of the built-up value in the building, thereby allowing Bromley to redeploy capital into other investment opportunities while adding diversification to the overall portfolio. “Our strong financial position in one of Manhattan's most dynamic office markets should allow us to attract and retain quality tenants well into the future,” Haines says.
In addition to Barnes & Noble, Carters Inc. is an office tenant at 122 Fifth, while the Gap has a major retail presence there. The latter recently completed a major renovation of its retail space at the property, adding 15,000 square feet of selling space on the lower level, to expand its presence to over 30,000 square feet on two levels.
“This was a low leverage loan on arguably one the best-in-class buildings in one of the hottest locations in Manhattan,” Appel says. “These attributes, including exceptional sponsorship, created tremendous demand among leading lending institutions.”
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