Another sizeable single-asset, single-borrower deal, the $1.3-billion COMM 201-3BP, joined the CMBS pipeline this week, according to a pre-sale from Fitch Ratings.
The deal's underlying loan, underwritten by Deutsche Bank’s German American Capital Corp., financed the $2.2 billion purchase of the 1.2-million-square-foot Three Bryant Park office property in Midtown Manhattan. The building was bought in January by private equity company SITQ US Investments, which is controlled by Ivanhoe Cambridge, a real estate subsidiary of the Caisse de depot et placement du Quebec.
The company has assets located mainly in Canada, the U.S., Europe, Brazil and Asia, totaling more than CAD40 billion ($31.8 billion) as of Dec. 31, 2013, according to Fitch. Ivanhoe Cambridge’s portfolio consists mainly of shopping centers, office and multifamily properties.
Fitch plans to give a 'AAA' to the senior notes, which benefit from credit enhancement of 43.4%.
The $1.125 billion mortgage loan has a Fitch debt service coverage ratio - the cash flow available to cover payments - of 0.97x and a loan-to-value ratio of 90.1%.
Based on the acquisition costs, Fitch calculated that the sponsor has approximately $878.7 million of equity in the transaction. The loan pays only interest for the entire 10-year term.
Three Bryant Park is located at 1095 Avenue of the Americas between 41st and 42nd Street. Firms at the property include MetLife, Verizon and Dechert LLP, among others. The building also includes 105,091 sf of retail space that features six “cubes” and a two-story, “jewel box”, flagship space at the property’s base on 42nd Street. Retail cubes cover 50,883 sf across five levels and currently feature Asics and fitness center Equinox, in addition to 15,361 sf of available space.
Situated between the office tower and the retail complex is a multilevel freestanding flagship jewel box, comprised of 5,030 sf of retail space across two levels fully available for lease. Whole Foods signed a lease in October to house a food hall and marketplace concept spanning 42,818 sf on three levels in the tower retail space.
The property was 96.9% leased as of November 2014.
The deal follows the $308 million securitization of a commercial mortgage used by private equity giant The Blackstone Group to purchase 1740 Broadway, an office building in midtown Manhattan, which began marketing las week. German American Capital Corp. also underwrote the 10-year loan obtained by Blackstone affiliate Blackstone Property Partners, L.P. in December 2014, according to a DBRS presale report.