Cushman & Wakefield served as the advisor to affiliates of Angelo Gordon & Co, Normandy Real Estate Partners and George Comfort & Sons in arranging $415 million of floating-rate financing secured by 575 Lexington Avenue.
The financing was provided by Paramount Group, Inc.’s Paramount Fund VIII.
575 Lexington Avenue is a 35-story, 744,445 s/f Class A office building located between East 51st and 52nd Street in Midtown Manhattan. Built in 1958, it is 86 percent leased. Ownership has recently executed 10 leases totaling nearly 87,000 square feet. Cornell University has a 212,000 s/f lease through 2028.
Normandy originally purchased the tower for $360 million in 2012 in a joint venture with New York Life and Prudential Real Estate Investors. Three years later, they recapitalized the building in a $510 million transaction in which New York Life sold its share to a partnership that includes Angelo Gordon & Co, George Comfort & Sons and Normandy .
A Cushman & Wakefield Equity, Debt and Structured Finance team of Steve Kohn, Alex Hernandez, Dave Karson, Gideon Gil, Alex Lapidus and Noble Carpenter, along with Adam Spies of Cushman & Wakefield Capital Markets represented ownership in the latest financing deal.
“The transitional financing market continues to improve for high-quality assets and sponsors,” said Kohn, President of the Equity, Debt & Structured Finance group.
Hernandez added, “The Owner’s business plan has been well received by the leasing market and the additional capital program will finish off the asset’s repositioning nicely.”
Ownership has maintained the property through investments in base building capital, tenant improvements and leasing capital. The sponsor has injected $25.9 million of capital into the property in connection with the transformation of the main entrance, lobby and elevators as well as replacement of many of the building’s mechanical systems. A $26.2 million capital plan, budgeted for 2018 alone, is currently underway.
Existing amenities include two levels of on-site below-grade parking, a New York Sports Club located on the second floor, Maison Kayser on the ground floor, as well as a Duane Reade located on the ground floor on the corner of 51st Street and Lexington Avenue.