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NEW YORK CITY-To achieve more economic flexibility and possibly better position itself for future acquisitions, Trizec Properties has completed $600 million of non-recourse refinancings on two Midtown offices that are jointly owned with Swig Co. The properties in question are the 1.5-million sf Grace Building at 1114 Avenue of the Americas and the 1.2-million sf World Apparel Center at 1411 Broadway.

Trizec’s share totals approximately $180 million after adjusting for the company’s 50% ownership interest and various loan closing costs. According to a company statement, the “transaction extends Trizec’s average debt maturity profile and provides the funds to unencumber more assets, thereby creating greater balance sheet flexibility.”

The company had been analyzing refinancing for “some time,” Jeffrey Echt,Trizec SVP and treasurer, tells GlobeSt.com. “We perceived there was a potential for the rates to rise.” A Swig Co. representative says the company would not directly discuss the refinancing and its plans for the proceeds.

The 49-story Grace Building bears a distinct curved facadeand is located directly across from Bryant Park. Tenants include Time Warner and Northwestern Mutual and space is currently advertised at $60 per sf. The 40-story Apparel Center is widely regarded as the premier apparel showroom building. Both sites are currently 98.4% occupied. Space is currently advertised at $48 per sf and the tenant base includes Nine West, Jones Apparel and Levi-Strauss.

Both are 10-year loans carrying an average face-rate of 5.52% and replace a 7.5% cross-collateralized loan totaling $207 million. Thelenders for this transaction were JPMorgan Chase, Morgan Stanley and Lehman Brothers.

Trizec, a Chicago-headquartered REIT, has ownership interests in and manages a portfolio approximately 43 million sf. Swig is a private company with more than seven million sf of office properties.

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