Goldman Sachs plans to issue a $900 million CMBS deal secured by the fee interest in 1515 Broadway in Midtown Manhattan, N.Y.
Standard & Poor’s assigned preliminary ratings to the deal that will offer investors $463.10 million of ‘AAA’ rated, class A notes. The capital structure also includes $126 million of ‘AA-‘ rated, class B notes; $ 109.6 million of ‘A-’ rated class C notes; $54.8 million of ‘BBB’ rated class D notes; $46 million of ‘BBB-’ rated class E notes; $90.9 million, ‘BB’-rated class F notes and ‘BB-‘ class G notes.
The property has a prime location in Times Square and is 99.5% occupied. Viacom, which houses its global headquarters at the address, occupies 70.5% of the building and has been a tenant at the property since 1989. The company recently renewed lease expires June 2031, according to the S&P presale report.
SL Green Realty Corp. is the loan sponsor and guarantor. The commercial real estate REIT is primarily focused on owning and operating office buildings in Manhattan. According to S&P, as of Dec. 31, 2012, the issuer owned interests in 85 Manhattan properties totaling 40.8 million sq. ft. This included ownership interests in 27.8 million sq. ft. of commercial properties and debt and preferred equity investments secured by 13.0 million sq. ft. of properties.
S&P noted in the presale report that the property must undergo $56.1 million in base building work and $77.9 million in tenant improvement that will be financed by SL Green; as part of the lease renewal agreement with Viacom.
The required work will be funded by a $51 million SL Green guarantee, $45 million in cash, and a $38 million letter of credit (LOC). S&P said that it made a transaction-level adjustment to account for the significant obligations guaranteed by SL Green.