Landlords Nab Rare Refinancing For 2 Grand Central-Area Office Towers
A family office and an investor have scored a $101.5M refinancing package for a pair of office properties in Midtown Manhattan in an increasingly dire capital markets environment for owners of commercial buildings with maturing debt.
Triangle Assets, along with real estate investor Faraj Srour, landed the loan, which refinances both 369 Lexington Ave., a 26-story office property, and an 18-story office building a few blocks south at 2 West 46th St., according to city property records. PincusCo first reported the deal.
The funding came from the Bank of Montreal and Citibank, replacing $73.5M in debt backing the buildings that was held by a commercial mortgage trust, JPMBB Series 2013-C15.
The investors secured the debt on the Class-B buildings in separate loans originated by Starwood Mortgage Trust in 2013, according to property records. Those were later packaged and sold into the CMBS trust, which had placed both on a watchlist because they were set to mature Oct. 6.
The 142K SF building at 2 West 46th St. was 98% occupied at the end of 2022, according to servicer commentary on the Morningstar Credit database. The 151K SF 369 Lexington Ave. building was nearly 97% occupied at the end of the year.
Triangle signed the Consulate General of Morocco and fertility clinic Yang Medical PC for almost 9K SF each at the Lexington Avenue building early this year, Commercial Observer reported.
The loan is a sign that not all banks have given up on office lending, despite much of the commentary surrounding the asset class.
The properties' strong occupancy and location likely helped their case — they are in one of the most popular submarkets for companies seeking office space in the city. The Grand Central area experienced its strongest quarterly performance since 2018 in Q3 with 1.3M SF of leases signed, according to Q3 data from Colliers. The submarket’s success comes amid a bleaker overall picture for the city’s office owners, who saw a 30% decline in leasing across the board during the quarter.
Triangle, run by founder and CEO Joseph Stavrach, owns 10 properties in total, all in New York City, according to the firm’s website. Srour, meanwhile, has owned at least 11 properties in the city, half of which have been office, PincusCo reported. The investor’s portfolio has $98.9M in debts, with New York Community Bank, Sterling National Bank and BCB Community Bank the portfolio’s biggest lenders.
Triangle, Stavrach, the Bank of Montreal and Citibank didn't immediately respond to Bisnow’s requests for comment. Srour could not be reached for comment.