Owners put up Paramount Plaza as collateral in $1.25B CMBS
The owners of New York office-tower Paramount Plaza are sponsoring a cash-out, $1.25 billion commercial mortgage refinancing for the famed Broadway district tower through a loan-backed bond sale.
BWAY Trust 2019-1633 is a single-asset, single-borrower securitization of a new mortgage taken out on the 48-story tower at 1633 Broadway. The 41-year-old building is home to the Gershwin Theater and its 16-year run of the Broadway musical “Wicked” as well as high-profile tenants like Allianz, The Bleacher Report, New Mountain Capital and Warner Music.
The deal sponsor, real estate investment trust Paramount Group (NYSE: PGRE), will pay off more than $1 billion in outstanding debt and collect approximately $139.9 million in proceeds from the transaction involving the west-side Broadway building, according to a presale report from Kroll Bond Rating Agency.
The notes offering will including a $1 billion Class A note (with a 2.99% coupon) as well as a subordinate $250 million Class B note, fully backed by a new $1.25 billion mortgage loan underwritten by a consortium of banks: Goldman Sachs, JPMorgan, Deutsche Bank’s German American Capital Corp. and Wells Fargo.
Paramount is located along a full block along Broadway between West 50th Street and West 51st Street, in the northern end of the tourist-heavy Theater District. The building was originally built as the Uris Building, headquarters for former New York private real estate development firm Uris Buildings Corp. It was renamed in the late 1970s when purchased by the current owners, Kroll’s report noted.
Paramount owns a portfolio of 18 office and retail building in New York, San Francisco and Washington, D.C. In New York, the company owns nine signature buildings outlining the Manhattan skyline, including Class A office buildings at 1301 and 1325 Avenue of the Americas.
Besides the Gershwin, Paramount Plaza also includes Circle in the Square Theater, a Broadway musical destination.
The property was previously used as collateral in a 2002 CMBS securitization, which was paid off in 2012 with no realized loss, according to Kroll.