A refinance mortgage backed by the historic 85th Tenth Avenue building that’s the east-coast home to Google – as well as the New York birthplace of the Oreo cookie – is being securitized via Deutsche Bank and Wells Fargo.
The $271 million DBFW 2016-85T is secured by a portion of a $396 million whole loan originated in November to refinance a 10-year-old loan for the 102-year-old office building in mid-south Manhattan’s Chelsea submarket.
The proceeds of loan, along with $229 million in mezzanine finance, were used to repay existing debt of $559.2 million and return $34 million of equity to the property’s owners, a joint venture aligned with the principals of prominent New York real-estate firms led by developers Stephen M. Ross (The Related Cos.) and Steven Roth (chair of Vornado Realty Trust).
The trust collateral includes two ‘A’ notes totaling $130 million and two ‘B’ notes combined for $141 million. Kroll Bond Rating Agency and Standard & Poor’s have each assigned ‘AAA’ ratings to the trust collateral portion of those notes, consisting of $106 million of the Class A notes, as well as ‘AA-’ to the $25.8 million of the B notes.
The rest of the whole mortgage loan is four ‘A’ notes totaling $125 million that will be parceled out to future CMBS transactions, according to KBRA. Some of the notes are being issued by German American Capital Corp. (one $78 million ‘A’ note and an $84.6 million ‘B’ note); and Wells Fargo, which is contributing a $52 million Class ‘A’ note and a $56.4 million ‘B’ note to the deal.
The debt being refinanced included $270 million in mortgage debt that was part of a pair of 2007 securitizations (COMM 2007-C9 and CD 2007-CD5, which never reported a delinquency).
The 10-year whole loan has an annual coupon of 3.82%, and is secured by the fee simple interest the borrower will obtain through its 99.6%-occupied building.
85 Tenth Avenue is a 635,000-square-foot, 11-story Class A office building in the West Chelsea, mid-South Manhattan office market that has attracted a host of global technology firms including Facebook, Twitter, AOL and Buzzfeed, according to KBRA.
The building is appraised as Class B+, but KBRA adjusts it to Class A based on the $70.83 per-square-foot contractual rents. The building dates to its original construction in 1914, and has had numerous renovations in the past 20 years – including a short-term conversion to a data center/telecom center before reverting back to a mixed-use office/retail use in 2005.
The building has 412,130 square feet of office space, 171,383 square feet of telecom/data center space, 41,450 square feet in retail, and over 7,000 square feet in storage/roof space.
Other tenants of the building include the Government Services Administration, the FBI’s joint terrorism task force, Level 3 Communications, a data storage company (Telehouse) and beverage distributor Moet Hennessey’s North American headquarters.
A century ago, the building housed Nabisco’s cookie factory, where it first developed the Oreo cookie.