Joint venture partners SL Green Realty Corp. and PGIM have struck a $1.4 billion refinancing deal for their Flatiron District Class A office tower, 11 Madison Avenue.
The loan comes from a CMBS loan from a group of financial institutions, led by Wells Fargo Bank. Others with participation include Goldman Sachs, Deutsche Bank, J.P. Morgan Chase, Bank of America and Bank of Montreal.
The new term will come in at five years, with SL Green's hedged rate coming in at 5.592 percent. The previous financing, which also amounted to $1.4 billion, included two mezzanine loans for $325 million and a senior mortgage of $1.075 billion.
SL Green and PGIM said that the moves reflect the resiliency in New York's office sector — especially for Class A assets. In August, Manhattan's office leasing increased by 20 percent month-over-month to reach 3.70 million square feet. The NYC borough is on track in 2025 to exceed 40 million square feet in new signings annually for the first time since 2019.
“This loan execution underscores our deep relationships with the lending community and the enduring strength of premier office assets,” Harrison Sitomer, chief investment officer at SL Green, said in a statement.
“The strong demand from global institutional bond investors resulted in one of the most successful CMBS executions in years, which is reflective of the exceptional quality of 11 Madison Avenue and the confidence investors continue to place in our platform.”
The 30-story property is 93 percent occupied by tenants, whose roster includes Fidelity, Sony, William Morris Endeavor, Suntory, Pinterest, Tempus AI and UBS. The building spans 2.3 million square feet and covers an entire block between Madison Avenue, 24th and 25th Streets and Park Avenue South. Also, 11 Madison is near Madison Square Park.
The JV was advised by CBRE and Newmark on the refinancing, with representation coming from Fried Frank.
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