Morgan Stanley plans to issue a $525 million of bonds backed by a mortgage on 150 East 42nd Street, a 42-story class A office building comprising 1.7 million square feet in the Grand Central submarket of Manhattan.

The loan backing MSC 2014-150E has a principal balance of $525 million and  is interest-only for its entire 10-year term and is schedule to mature in September 2024, according to Standard & Poor’s presale report. The  interest rate on the loan is 4.30%.

The mortgage collateral is a class A office building located near Grand Central Station. The building was constructed in 1954 to serve as Mobil Oil's headquarters, but S&P said that “the build-outs on the occupied floors are above average.” 

Approximately $41 million is in place for the build-out of the currently unoccupied floors. The common areas such as the lobby and elevators have recently been renovated and are in very good condition. The previous owner spent $12.9 million on repairs and upgrades to the roof and elevators over the past two years.

On offer are $255 million of ‘AAA’ rated class A notes, $39 million of ‘AA’ rated class AS notes, $20 million of ‘AA-’ class B notes, $45.4 million of ‘A-’ rated class C notes; $55.7 million of ‘BBB-’ class D notes, $25 million of ‘AA+’ rated class E notes, $50.4 million of ‘BB-’ rated class F notes and $34.5 million of ‘B’ rated class G notes.

 

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