Paramount Group has completed an $860 million refinancing of 1301 Avenue of the Americas, a 1.7 million square-foot trophy office building, located between 52nd and 53rd Streets in Midtown Manhattan, that is currently 71.5 percent leased.
The new five-year interest-only loan has an initial weighted average interest rate of 2.96 percent and is comprised of a $500 million tranche that bears interest at a fixed rate of 3.11 percent and a $360 million tranche that bears interest at a variable rate of LIBOR plus 2.65 percent.
The proceeds from the refinancing were used to repay the existing $850 million loan that was scheduled to mature in November 2021.
“With the refinancing of this high-quality Class A asset in today’s attractive credit markets, we have strengthened our balance sheet and improved financial flexibility,” said Wilbur Paes, Chief Operating Officer, Chief Financial Officer, and Treasurer of Paramount. “This transaction is a strong endorsement of the strength of the New York City office market and a testament to the confidence the capital markets have in our platform.”
During Paramount’s Q2 2021 earnings call chairman Albert Behler said the 500,000 s/f space at 1301 left by Barclays when it relocated to Hudson Square was the company’s primary focus.
He said, “We believe Sixth Avenue is one of the most desirable submarkets in the city. Our space is centrally located in that submarket in a high-quality building with large and efficient floor plates, which remains very attractive to prospective tenants over the long term.”