Paramount Group, Inc. has announced a $900 million refinancing of its Manhattan Class A office, 1301 Avenue of the Americas.
The new loan will carry a 6.39 percent fixed rate, with maturity scheduled for August 2030. Paramount plans to mainly use the funding to pay off the $860 million existing debt, which was originally set to expire this month. Also, the REIT said it will use a small portion of the proceeds for leasing costs in the future.
Paramount noted that the refinancing was made possible thanks to the recent leasing momentum it's been seeing at 1301 Avenue. The 1.8 million square foot building is more than 97 percent occupied. This includes Benesch, Friedlander, Coplan & Aronoff LLP, which in May signed a 16.5-year, 121,000 square foot lease at the property.
"This transaction reflects our proactive and disciplined approach to capital management,” Ermelinda Berberi, executive vice president and chief financial officer and treasurer of Paramount," said in a statement, regarding the 1301 Avenue refinancing.
“It reflects our confidence in the long-term value of this premier Midtown asset and showcases our ability to execute in today’s selective credit environment.”
Positioned between 52nd and 53rd in Midtown, 1301 Avenue was designed by Skidmore, Owings & Merrill. The 45-story property includes 30,000 square feet of retail space and a tenant amenity center on the lower level. Additionally, 1301 Avenue provides direct access to Rockefeller Center.
Paramount, which operates Class A offices in San Francisco and New York City, signed 688,584 square feet of leases during the first half, with the company's share at 442,068 square feet, according to its second-quarter financial report. The New York-based firm said that this amount partially offset expirations.
For all of Manhattan, in particular, the office market is on pace to see the strongest annual leasing in six years, according to a report from Colliers. It comes after a strong July, where signings surged by 10.7 percent to about 3.01 million square feet.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.