Bank of America Merrill Lynch and Barclays plan to securitize a $273 million commercial mortgage loan that is secured by the newly constructed 51 Astor Place, a class-A office tower located in New York, NY, according to Kroll Bond Rating Agency.
The property, which is designed by Fumihiko Maki, is owned by Edward J. Minskoff Equities.
BAMLL 2015-ASTR will offer $143.7 million of AAA’ rated class notes and $33.5 million of AA- rated class B notes that are all due on July 2037.
The notes are collateralized by a 12-year loan that pays only interest at an annual rate of 4.26%. The loan, based on a third-party appraised value of the property, has a loan to value (LTV) ratio of 46.1%. However, Kroll puts the LTV much higher, at 89.1% though in line with other large loan CMBS deals rated by Kroll this year.
The property is newly constructed, so it lacks operating history. As of May 2015, it was 96.8% leased to 11 tenants, the three largest of which are IBM Watson Group, a division of International Business Machines (IBM) that is a High Quality Credit Worthy Tenant (HQCWT), St. John’s University, and 1stdibs. Together, the three tenants account for 58.4% of total base rent.
Five leased spaces totaling 82,506 sf (21.4% of total square feet) are not yet occupied, including CVS, IBM Watson Group (25,401 square feet of the tenant’s 143,836 square feet), Perceptive Advisors, Spark Capital and Tudor Investment Corporation. Rent commencement dates for the space range from August 2015 through January 2016. Kroll stated in the presale that the expectation is that the tenants will take their respective spaces by January 2016.
The loan was used to retire $171 million of construction debt; establish reserves of $459,314 for real estate tax equivalency payments, $2.7 million for free rent, and $9.8 million for tenant improvements and leasing commissions (TI/LC); pay closing costs, and return approximately $181.3 million of equity to the sponsors, Edward J. Minskoff Equities.