Rithm Capital is putting the finishing touches on its first significant capital markets transaction as the new owner of Paramount Group.
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The Manhattan-based real estate company has lined up a $282.5M single-asset, single-borrower CMBS loan for 1325 Sixth Ave. with JPMorgan Chase, according to a KBRA report.
Rithm acquired the 34-story, 825K SF Midtown Manhattan office tower as part of its $1.8B takeover of Paramount Group, which closed in December. Its new five-year, fixed-rate loan is expected to be priced at a 6.6% interest rate, according to KBRA.
The debt will be used to repay a $250M balance sheet loan tied to the property with JPMorgan, plus cover $14.7M of free and gap rent and $10.6M of outstanding tenant improvements and closing costs. Rithm is chipping in $4M of equity to seal the deal, according to KBRA.
The tower, which was developed in 1989 by Edward Minskoff, was 89.7% leased as of January, with education solutions platform McGraw Hill paying 18.1% of base rent for its 136K SF lease and the New York Hilton Midtown paying 8.5% of base rent for the building’s second through fourth floors as event space.
Other larger tenants include law firm Olshan Frome Wolosky, offices for the MLB Players Association and the U.S. branch of Japanese news organization Nikkei, which together pay another 18.9% of base rent.
Paramount spent $41.4M on upgrades between 2022 and 2025 and renovated the lobby with 27-foot ceiling heights and a gas-burning fireplace, according to the KBRA report. The building was appraised at $395M.
Rithm didn't respond to a request for comment. JPMorgan Chase declined to comment.
The refinancing follows news that Rithm is seeking to sell a stake in Paramount's trophy property, the 1.8M SF, 45-story office at 1301 Sixth Ave., at a value of $1.4B, The Real Deal reported last month.
Rithm's takeover of Paramount's 13M SF portfolio comes as the Securities and Exchange Commission investigates Paramount Group.
The SEC investigation followed revelations from Paramount Group’s 2024 annual report that the company had paid $4M to companies owned by Paramount’s longtime CEO, Albert Behler, and his spouse, Crain’s New York Business previously reported.
Paramount planned to give Behler a $34M golden parachute when the sale went through. While shareholders approved the sale in December, they rejected Behler’s exit package.
Rithm, led by CEO and President Michael Nierenberg, beat out bids from SL Green and Vornado after Paramount’s board put the company up for sale in May.
Its deal valued Paramount at $6.60 per share, 11% below the $7.39-per-share price after markets closed the day before the sale went through and at what Nierenberg said was roughly 30% below replacement cost.
The SEC has since ramped up its investigation into Paramount, which originally related to its disclosures of the use of corporate assets, conflicts of interest, executive compensation and related-party transactions.
It has now subpoenaed at least one Paramount executive, and at least one former Paramount board member has also had conversations with the SEC, The Real Deal reported Wednesday, citing unnamed sources.
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