New office product and the extension of public transportation catering to the growing contingent of media and creative tenants into far west Manhattan office markets has fueled competition among investors for stabilized office product in the Penn Plaza submarket. And tenants aren’t the only ones taking note; lenders are staking a claim as well.
On behalf of Savanna, JLL announced the firm’s Capital Markets team has secured a $140.5 million loan to refinance 31 Penn Plaza on 31st Street between Sixth and Seventh Avenues. Morgan Stanley provided the floating-rate financing.
Managing Director Kelly Gaines and Vice President Aaron Niedermayer led the JLL team on the financing, following a successful leasing effort by Vice Chairmen Mitchell Konsker, Matthew Astrachan and Associate Matt Polhemus.
“The proximity to multiple sources of transportation along with Savanna’s extensive repositioning of the building and JLL’s leasing campaign that brought 31 Penn Plaza to near full occupancy created significant value in the asset,” said Gaines. “We advised Savanna to defease the existing CMBS loan and refinance with floating rate debt to take advantage of historically low interest rates and gain flexibility in the loan structure.”
Added Konsker, “Tenants are increasingly ready to explore new and creative submarkets and Penn Plaza’s fundamentals are in line to deliver significant rent growth for landlords and investors.”
Since 2011, JLL’s Agency Leasing team has leased more than 225,000 square feet of office space at 31 Penn Plaza.
The 444,132-square-foot office building is located less than one block from Penn Station, in the midst of Manhattan’s rising Penn Plaza submarket. The building features a newly renovated lobby and security system as well as ground floor retail space.
“After identifying the leasing shift toward new, state-of-the-art Midtown West office product, JLL executed a very strong leasing campaign and secured creative financing that will enhance the property’s value and provide us with options looking forward,” said Nick Bienstock, Managing Partner at Savanna.