Americas Tower, the 47-story, office building located on Avenue of the Americas in New York City, backs the latest large-loan CMBS.
The deal, AOA 2015-117, is collateralized by a $360 million, seven-year loan underwritten by Cantor Commercial Real Estate Lending, L.P. (CCRE) and German American Capital Corporation, a Deutsche Bank subsidiary, on Dec. 4, 2014, according to a Kroll Bond Rating Agency presale report.
California Teachers’ Retirement System (CalSTRS), Silverstein Properties, and UBS (US) Trumbull Property Fund LP used the loan to refinance $350.2 million of debt.
The loan pays only interest, and no principal, for its entire term. However it has a relatively low loan-to-value ratio of 73.2%compared with other large-loan CMBS rated by Kroll. “It is important to note [interest-only] loans, which do not provide amortization, are not, in and of themselves, less creditworthy than amortizing loans,” Kroll's presale report states. “An [interest-only] loan that has relatively lower beginning and ending leverage levels than an amortizing loan may be more favorable from a credit standpoint.”
The Americas Tower was built in 1992 and is comprised of 969,217 square feet of office space, 51,660 square feet of concourse space, 5,064 square feet of retail space, and 4,045 square feet that is used for storage and the management office. As of October 2014, the property was 91.9% leased; the two largest tenants are Kramer Levin Naftalis & Frankel LLP, an American Lawyer Top 100 law firm, and Bank Hapoalim, a high Quality credit worthy tenant, according to Kroll. Together, the two tenants account for 40.1% of total base rent.
Kroll plans to rate $248 million of class A notes AAA’ and $46.2 million of class B notes AA-’. The rating agency will not rate the class C and D notes.