Ivanhoé Cambridge has acquired a 49.9% ownership interest in 1411 Broadway, a 40-story midtown office tower, for over $360 million.
The joint venture agreement with The Swig Company includes a managing interest for Ivanhoé Cambridge and a “significant investmentˮ by both parties towards the physical improvement, energy efficiency and tenant amenities of the building in the short term.
Occupying a full block in midtown, 1411 Broadway totals 1.2 million s/f.
“This office building’s location, size and quality give it uncommonly attractive leasing features, allowing us to generate attractive returns for our depositors,” said Daniel Fournier, chairman of the board and chief executive officer of Ivanhoé Cambridge.
“We are particularly pleased to partner up with The Swig Company and to kick-start what we hope will be a lasting and fruitful relationship with Callahan Capital Partners.”
Jeanne Myerson, CEO of San Francisco-based The Swig Company, said: “We look forward to this new partnership with Ivanhoé Cambridge and to investing alongside them to bring 1411 Broadway, which was originally developed by our company founder, further success.”
Ivanhoé Cambridge is one of the world’s 10 largest real estate companies. It is a real estate subsidiary of the Caisse de dépôt et placement du Québec, one of Canada’s leading institutional fund managers.
Headquartered in San Francisco, The Swig Company is a private investment company.
The Blackstone Group was the seller of the 49.9% stake in 1411 Broadway.
According to Commercial Mortgage Alert, Deka Bank and HSBC have agreed to write a $375 million fixed-rate mortgage on 1411 Broadway. (http://www.cmalert.com/headlines.php?hid=159585)
The seven-year loan, which the news site said is expected to close this week, comes in conjunction with a recapitalization of the 1.1 million-square-foot property, known as the World Apparel Center.
Ivanhoe’s purchase values the building at $735 million. That puts the loan-to-value ratio at 51%. Eastdil Secured brokered the mortgage for Swig and Ivanhoe, according to CMA.
Deka and HSBC each committed to fund half of the loan, a portion of which could be syndicated. A little more than half of the proceeds will go toward retiring the existing $203.5 million fixed-rate mortgage. That 10-year loan, which had an original balance of $219 million, was written in 2004 by the team of Morgan Stanley, Lehman Brothers and J.P. Morgan. The lenders carved up and securitized the 5.5% loan in four deals.
Swig Co. developed the building in 1970 through a partnership with the Weiler family of New York. In 1997, Trizec Properties acquired the family’s interest. Blackstone assumed Trizec’s stake in 2006 through its $7.2 billion takeover of the Chicago REIT.