Onassis Team Seeks Refi of NY Trophy, Again

Months after refinancing debt on the Olympic Tower office/retail complex in Midtown Manhattan, the owners want to do it all over.

The ownership team, led by a philanthropic arm of the Onassis family, is seeking a mortgage of roughly $250 million on a billion-dollar trophy — 510,000 square feet of office and retail space on Fifth Avenue between East 51st and East 52nd Streets. The borrower’s preferences are fluid, and it is looking at various proposals to determine its best pricing and term options. The assignment is being shown mainly to portfolio lenders, including banks and life companies.

The new debt would replace a $250 million loan originated in March by a wealth-management unit of Deutsche Bank. That fixed-rate loan enabled the owner to pay off a maturing $125 million mortgage and take out roughly the same amount of cash.

Since then, the property’s ownership has changed. Alexander S. Onassis Public Benefit Foundation, which had been the sole owner, sold a 49.9% stake in May to Crown Acquisitions, headed by New York investor Stanley Chera. The deal valued the property at about $1 billion, according to published reports.

Why does the Onassis-Crown partnership want to refinance again? According to a source, the Deutsche loan contains certain recourse provisions that make Crown uncomfortable.

Other lenders now have a second chance to win a coveted assignment: a mortgage with a loan-to-value ratio under 30% on a top-flight property in the heart of Midtown. One lender familiar with the deal said that given the low leverage, drawing up proposals for the loan is “a pricing exercise, not a risk exercise.”

The property encompasses the lower 21 floors of the 51-story Olympic Tower building, at 641 Fifth Avenue, plus three adjacent townhouse-style buildings at 647 and 653 Fifth Avenue and 10 East 52nd Street. A ground lease is held by investor Lloyd Goldman.

The tower, built in 1975, has residential condominiums on the upper floors, overlooking St. Patrick’s Cathedral and Rockefeller Center. Office tenants include the headquarters of the National Basketball Association. The townhouses are occupied by luxury retailers including Versace and Cartier.

The Onassis organization said in May that it sold an interest in the property to Crown because it wanted to draw on that company’s experience in the Fifth Avenue shopping corridor. Crown’s holdings include stakes in a retail condominium at 666 Fifth Avenue, across from Olympic Tower, and the 560,000-sf office/retail building at 530 Fifth Avenue. Most, if not all, of the retail leases at Olympic Tower and the adjacent buildings are scheduled to roll over in the next few years, giving the owners an opportunity to raise rents or reposition space.

The late Greek shipping tycoon Aristotle Onassis bequeathed half of his fortune to the foundation. It was named after his son, who was killed in a plane crash in 1973 at age 25.

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