Bank Of America Merrill Lynch and Wells Fargo plan to securitize a $1.4 billion loan that is secured by the MetLife Building in New York City, according to Fitch Ratings and Kroll Bond Ratings Agency.
Proceeds from the deal, called BAMLL Commercial Mortgage Securities Trust 2015-200P, will refinance $1.2 billion of existing debt; escrow $60 million in upfront reserves for unfunded landlord obligations including free rent, tenant improvement and leasing commissions; pay $18.4 million in closing costs; and return approximately $153.6 million to the sponsor. The property was previously securitized in LBUBS-2005-C3, LBUBS-2005-C5, and LBUBS-2005-C7.
The 10-year loan is structured with an LTV as calculated by Fitch of 88.1% and pays only on interest for its entire term. The borrower is an investment venture managed and controlled by an affiliate of Tishman Speyer Properties, and is majority owned by an affiliate of Irvine Company. Tishman Speyer is also the property manager, and has served in that capacity since its acquisition of the subject property in 2005.
Fitch and Kroll assigned preliminary triple-A ratings to the class A notes and double-A minus ratings to the class B notes. Kroll plans to rate the class C notes A-,' the class D notes BBB-,' and the class F notes 'BB-.' The class E notes will not be rated by either rating agency.
The MetLife Building, located at 200 Park Avenue in New York, was approximately 87.9% occupied and 99% leased as of March 2015, according to the presale reports.
Tenants include MetLife, which recently signed a lease expansion. Barclays Bank, previously the largest tenant at the building, recently executed a lease termination agreement on 357,405 sf, surrendering the majority of its space by Dec. 1, 2015. MetLife will take over the space.
Barclays has also indicated that it intends to vacate the 27th floor upon lease expiration in July 2017, which Barclays currently subleases to Ignitionone, Inc. and Novus Partners, Inc. Paul Hastings, which recently signed a lease for the 26th, 28th, 29th and 30th floors, has an expansion option available to take the 27th floor.