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CMA
July 22, 2016  

CIBC Syndicate Backs Lord & Taylor Flagship

A CIBC syndicate has originated a $400 million floating-rate loan on Lord & Taylor’s flagship store in Midtown Manhattan.

The borrower, Hudson’s Bay Co. of Toronto, swapped the coupon to a 4.3% fixed rate at the closing this week. The 658,000-square-foot building, at 424 Fifth Avenue, was appraised at $655 million, putting the leverage ratio at 61%.

CIBC was the sole lead arranger of the five-year mortgage. The eight other syndicate members are Aareal Capital, CIT Group, First Commercial Bank, TD Bank, Scotiabank, RBS Citizens Bank, Societe Generale and TIAA.

Hudson’s Bay used most of the proceeds to retire a $250 million floater that CIBC and Natixis originated in 2012. Those lenders subsequently syndicated pieces of the loan to Aareal, Aozora Bank, an arm of investment shop Raymond James & Associates and RBS.

Hudson’s Bay was assessed a 1% prepayment fee. The company, which also owns the Saks Fifth Avenue chain, said it used some of the proceeds to reduce the balance on its revolving credit facility.

Lord & Taylor’s flagship store occupies nearly all of the 11-story building, which is on the west side of Fifth Avenue between West 38th Street and West 39th Street. Hudson’s Bay uses some space for corporate offices. The property was constructed in 1914 and underwent a $25 million renovation in 2011.