The Bromley Companies has closed a 30-year $48.4 million refinancing of 122 Fifth Avenue.
The 236,000 s/f 10-story office building with retail sits at the heart of the Union Square/Lower Fifth Avenue submarket between West 17th and West 18th Streets.
Aaron Appel, a managing director at Meridian Capital Group, arranged the financing with First Republic Bank.
“This was a low leverage loan on arguably one of the best-in-class buildings in one of the hottest locations in Manhattan,” said Appel. “These attributes, including exceptional sponsorship, created tremendous demand among leading lending institutions.”
122 Fifth is fully occupied by three publicly-traded tenants — Barnes & Noble, Carters Inc. (OshKosh B’Gosh children’s clothes) and The GAP.
The GAP recently completed a major renovation of its retail space in the building, adding 15,000 s/f of selling space in the lower level, to expand its presence to over 30,000 s/f on two levels.
Over the last four years, the building has benefited from significantly improved market conditions of higher rents and occupancies resulting from the migration to the area of an ever-widening range of tenants, including creative service firms and high-tech companies attracted to the historic loft-style layouts and amenity base.
“This was a unique and opportunistic moment to improve the building’s capital structure,” said Nicholas Haines, Bromley’s chief executive officer.
“We reduced our borrowing costs by more than 200 basis points and were able to obtain a 30-year loan with significant flexibility. We were very pleased with Meridian’s execution and delighted to establish a new relationship with a first rate bank like First Republic.”
The refinancing monetizes, on a tax-favored basis, some of the built-up value in the building permitting capital to be redeployed into other investment opportunities while adding diversification to the overall portfolio.
“Our strong financial position in one of Manhattan’s most dynamic office markets should allow us to attract and retain quality tenants well into the future,” added Haines.