Brookfield Nears $1.25B Refi For Hudson Yards Office Building
Brookfield is lining up a giant refinancing, secured by an office property in Hudson Yards leased to JPMorgan Chase and Amazon.
The Canadian property giant is slated to land $1.25B to refinance Five Manhattan West, a 16-story, 1.7M SF office building in the heart of Brookfield's Manhattan West development between the Hudson Yards megaproject and Penn Station.
The bulk of the debt — a fixed-rate, five-year $985M loan — is being provided by Citi Real Estate Funding, Bank of Montreal, Deutsche Bank, JPMorgan Chase and Société Générale, according to a presale report by Kroll Bond Rating Agency. The mortgage is expected to close at the end of the month.
The debt is broken into $320M of senior A notes and $665M of junior B notes. The remaining $265M is anticipated to come from future CMBS transactions, according to the report.
Brookfield has committed to pay $9.4M of equity alongside the new debt, which is expected to address $1.23B of balance sheet debt, fund the building's reserves and pay closing costs. Under the terms of the deal, Brookfield will also commit to spending up to $123M for future tenant improvement and leasing costs.
Brookfield acquired the property at 450 W. 33rd St. in 2011 and completed a $350M renovation in 2017.
As of August, the property was fully leased to 16 office and retail tenants, including JPMorgan and Amazon. Those two companies occupy nearly half of the building, according to KBRA.
Amazon’s lease was inked as part of the e-commerce giant’s recent office expansion in New York City. It signed a 112K SF sublease, which runs through October 2032, in the first quarter.
The company pays an in-place base rent of $89.11 per SF for its space, below the appraiser’s estimated market rent of $110 per SF, according to the KBRA report. It has three five-year extension options along with one termination option, which must be executed before December 2028. In order to act upon the termination option, Amazon would have to provide 24 months’ notice and pay a fee of approximately $300 per SF.
A Brookfield representative didn't immediately respond to Bisnow’s request for comment.
The mortgage continues a torrid resurgence of CMBS financing to premier Manhattan office properties. SL Green and Prudential Financial are set to refinance the $1.4B mortgage at 11 Madison Ave., Crain’s New York Business reported Monday. The co-owners are expected to provide $52.5M to secure the new five-year loan tied to the 2.3M SF office tower.
Both of those loans are single-asset, single-borrower deals, which made up nearly three-quarters of the $59B of CMBS loans issued in the first half of the year, according to Colliers.
The deals are close to closing as the Federal Reserve is widely expected to cut its benchmark interest rate for the first time this year. A decision, which has the potential to spur business activity in the final four months of 2025, will be announced Wednesday.
