12/21/2012

$800 Million Loan Sought on Worldwide Plaza

The owner of one of New York’s largest office towers is shopping for an $800 million fixed-rate loan.

A joint venture led by George Comfort & Sons wants to put the long-term mortgage on the 1.8 million-square-foot One Worldwide Plaza, at 825 Eighth Avenue in Midtown Manhattan. Eastdil Secured is showing the assignment to securitization shops, banks and insurers. The buzz is that Bank of America, Deutsche Bank, J.P. Morgan and Morgan Stanley are among those in the running.

The move to refinance the 47-story building represents a change in plans by the ownership team, which also includes New York investment firms DRA Advisors, Feil Organization and RCG Longview. The group put the property up for sale in May, with expectations that it could fetch as much as $1.7 billion.

But even as it was entertaining bids, the group pursued a back-up plan — holding quiet discussions with a handful of lenders in September about a $900 million loan. A few weeks ago, they began shopping for debt in earnest, after trimming the amount.

What happened to the effort to sell the complex? The auction proceeded to a final round with two competitors, including a joint venture between Paramount Group of New York and RXR Realty of Uniondale, N.Y. But the owner then changed course — perhaps because of dissatisfaction with the offers.

The size and other details of the property’s existing debt are unknown. The George Comfort team acquired the building in July 2009 for $700 million from a lender group led by Deutsche. At the time, Deutsche was expected to provide financing to the buyer, but it’s unclear if it did.

The lenders had seized the property from Macklowe Properties of New York. Harry Macklowe’s firm acquired the building in early 2007 as part of a package of eight Manhattan office properties that it bought from Blackstone for $7 billion. The price allocated to One Worldwide Plaza in that deal was $1.7 billion, according to Real Estate Alert’s Deal Database.

The 2007 transaction came as Blackstone flipped properties it had acquired through its takeover of Equity Office Properties. Macklowe financed the purchase with a massive debt package arranged by Deutsche. But the downturn left him unable to refinance the one-year debt, which had no extension options, and he ultimately lost control of all eight buildings — plus the General Motors Building, which was also pledged as collateral.

One Worldwide Plaza, between West 49th and West 50th Streets, was built in 1989. It is 91.1% occupied, with the largest tenant, law firm Cravath Swaine, leasing 674,000 sf, according to CoStar. Other tenants include Nomura and WNet.

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