Olayan America has secured a $570 million bridge loan for its $1.3 billion purchase of the Sony Building.
ING Capital said it originated the senior secured bridge loan for the US investment arm of The Olayan Group to purchase to tower at 550 Madison Avenue from the Chetrit Group and Clipper Equity.
The short-term loan is secured by a first mortgage on the skyscraper where Chetrit and Clipper recently scrapped plans for create a luxury condo.
“ING committed the bridge facility very quickly at attractive terms so that this deal could conclude within a very tight time frame,” said Nadim Tabbara, chief financial officer of The Olayan Group.
The 37-story building in the Plaza District of Manhattan has 852,830 s/fof rentable mixed-use space, but is effectively vacant since the departure of Sony to 11 Madison avenue.
The sole tenant is the Prime Grill kosher steakhouse, which occupies 5,000 s/f on the ground floor.
The vacancy provides Olayan, and asset manager Chelsfield ,an opportunity to rebrand the building and create value by renovating and reconfiguring the existing space, according to ING.
“The Sony Building is a New York City landmark,” said Craig Bender, managing director with ING. “We are especially proud to have worked on this deal for one of our longstanding global clients. Our long-term real estate investment outlook is strong, and we look forward to seeing how Olayan and Chelsfield reposition this property in the future.”
Construction of the building was completed in 1984 as the global headquarters of AT&T. It has been sold on just two previous occasions – to Sony Corporation in 2002 and in 2013 to the Chetrit Group, which paid $1.1 billion.
“The property has been maintained to a high standard and has never previously been available to the open market for office leasing,” said Tony Fusco, head of Real Estate at Olayan America.