A commercial mortgage-backed security (CMBS) linked to a single borrower in New York’s Garment District — the 23-story Eleven Penn building — is being prepped for issuance, according to a pre-sale report by Kroll Bond Rating Agency.
Called VNDO 2013-PENN, the $450 million deal is backed by a first line mortgage jointly originated by UBS Real Estate Securities (60% of the loan) and Wells Fargo Bank, National Association (40%) on Nov. 27.
Eleven Penn houses the corporate office of Macy’s, which covers over 54.4% of the building’s total square footage. The department store’s leases in the building run through April 2035. Also leasing out space at Eleven Penn are AMC Networks and Madison Square Garden, whose arena is just west of the building.
Kroll gave a $243.5 million A tranche a preliminary rating of AAA(sf).’ Other tranches were unrated, including a B piece for $54.1 million and a C one for $40.6 million.
The flows will come from fees on the 1.1 million square foot building. Bearing a 3.95% coupon, the loan has a seven-year term and is paid monthly on an interest-only basis. Office space occupies 980,717 sf of Eleven Penn, retail businesses use up 31,014 sf, and storage space takes up 86,905 sf. Erected in 1923, the building went through a renovation in 1981 and an expansion in 2012. As of November, it contained 15 tenants.
The deal is part of a refinancing by Vornado Realty Trust.
Citi, Wells Plan Hotel CMBS
Citigroup and Wells Fargoplan to market a $295 million CMBS deal that is backed by 16 hotels; 15 of the hotels are affiliated to major brand hotels that include Marriott, Sheraton, Holiday Inn, SpringHill Suites and Residence Inn by Marriott.
The deal, CGWF Commercial Mortgage Trust 2013-RKWH, is collateralized by an interest-only, floating rate loan that has an initial two-year term and provides for three, one-year extension options.
In addition to the first-mortgage loan, there is a $55 million senior mezzanine loan and a $50 million junior mezzanine loan.
Standard & Poor’s has assigned a rating of AAA’ to the class A notes; AA-’ rating to the class B notes; A-’ rating to the class C notes; BBB-’ rating to the class D notes; and BB-’ rating to the class E notes.
