In one of the largest deals of this year in Manhattan, N.Y., The Durst Organization has secured a $1.3 billion refinancing loan for One Five One, a 1.8 million-square-foot office tower in Times Square. Wells Fargo Bank, JP Morgan Chase Bank, National Association and Bank of America co-issued the five-year mortgage-backed security loan, which bears a 5.8 percent interest rate.
The current loan will retire $1.07 billion in existing debt and set aside $50 million to cover re-tenanting costs in case the property’s largest tenant, TikTok, defaults on its lease, according to S&P Global. The ownership expects to get $146.1 million in returns after the refinancing. The deal will close later this month.
One Five One came online in 1999 at 151 West 42nd St. With average floorplates of 55,000 square feet, the 48-story mixed-use trophy tower features 72,527 square feet of retail space on the ground floor. Still, more than 75 percent of the gross income generated at the property comes from the office portion. Meanwhile, the retail component accounts for 11.5 percent, S&P also reports.
A strong tenant roster
Apart from TikTok, the building’s other tenants include H&M, Nasdaq, BMO Capital Markets and Venable LLP, with the top five largest firms occupying almost 840,000 square feet at the property. One Five One was 92.3 percent leased at the time of the deal.
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In 2017, the tower underwent a $150 million renovation which added a new entrance and lobby, as well as improved energy systems. Amenities at the LEED Gold-certified One Five One include a lounge area with a pool, 24/7 access, bike storage, conference center, and a café. The office building is valued at approximately $2.3 billion.
The lending group included Wells Fargo Managing Director Barry Goldman, with Cadwalader, Wickersham & Taft LLP providing legal counsel. The Durst team comprised Chairman Douglas Durst, President Jody Durst, Director Lucas Durst and CFO Ira Marx, with Chatham Financial providing financial advice, and Rosenberg & Estis, P.C. offering legal support.
Manhattan vacancy rates decreased year-over-year
Currently, there are 14,000 properties across the U.S. with loans set to mature either soon, or by the end of 2027, accounting for 33 percent of all office loans in the country, or otherwise $290 billion, according to the latest Yardi Matrix office report.
June saw Manhattan’s office listing rates clock in at $67.97, down 4.7 percent year-over-year, yet still more than double the national figure of $32.87. Vacancy rates in the borough dropped to 15.2 percent during the same month, reflecting a 130-basis-point decrease compared to the same period last year.
