SL Green and Prudential Financial are nearing a refinancing deal for the $1.4 billion mortgage on 11 Madison Avenue in Manhattan, according to Crain’s. The proposed package would have a five-year term, which is half the length of the debt that is set to expire, based on information from an S&P Global report.
The new loan will come with several conditions. The interest rate is expected to rise from 3.6 percent to 5.8 percent, and the property owners will be required to provide a $52.5 million down payment as part of securing the financing.
Both SL Green and Prudential Financial declined to comment regarding details of the transaction.
SL Green purchased the full-block office tower from Sapir Organization and CIM Group in 2015 for $2.6 billion. In 2016, SL Green sold a 40 percent stake in the building to PGIM Real Estate, which is affiliated with Prudential, for $480 million.
The original acquisition was financed by SL Green using a $1.1 billion senior CMBS loan along with $325 million in mezzanine debt.
As of March 2020, Credit Suisse was listed as the primary tenant at 11 Madison Avenue, occupying about 1.3 million square feet at just under market rate rents—$65 per square foot compared to an average base rent at that time of $70.47 per square foot.
In recent developments, Pinterest negotiated for space at the building during spring and ultimately signed on for 83,000 square feet according to reporting by New York Post (https://nypost.com/2024/06/01/real-estate/pinterest-takes-83000-square-feet-at-11-madison-ave/). Other tenants include Fidelity, Suntory, Tempus AI and William Morris Entertainment; occupancy stands at approximately 93 percent according to S&P Global (https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/new-york-s-largest-office-landlord-faces-tough-market-77724167).
Marc Holliday’s firm continues its activity in New York City beyond this refinancing effort: SL Green is among those considering bids for Paramount Group as that real estate investment trust undergoes what it has described as a “strategic review.”
