The Hudson Yards 2025-SPRL Mortgage Trust is preparing to market a five-year $2.5 billion refinance for the Spiral, the trophy office building in Hudson Yards, the New York City neighborhood between Chelsea and Hell's Kitchen.
The 1,031-foot class A glass tower office building includes Pfizer and TPG Global as tenants. Most tenants are law, financial services and healthcare firms, according to Morningstar | DBRS. As of January 2025, the tower is 93.8% leased, with a weighted average (WA) remaining term of 16.7 years, and a stabilized appraised value of $1,617 per square foot.
The commercial mortgage-backed security is structured to repay investors through about six tranches of notes, DBRS said. The rating agency assigned AAA, AA and A to classes A, B and C, respectively; BBB to classes Dand E; and BB to class F, respectively.
Loan-to-value ratios by tranche break down to 55.2%, 61.6% and 68.3% on classes A, B and C notes; and 77.7%, 83.2%, and 84.5% on classes D, E and F.
Most of the underlying leases collateralizing the loan are to long-term credit tenants, meaning they have investment-grade ratings and have leases that are expected to expire beyond the loan maturity date DBRS said. Just four leases will expire during the loan's five-year term.
The loan has a cap rate of 6.25%. It is structured with interest-only payments over its fully extended loan term, so the loan's principal balance will not be reduced unless the sponsor decides to make a paydown. DBRS pointed out, however, that the lack of principal payments increases refinance risk maturity should the appraised value not remain stable.
Hudson Yards 2025-SPRL is structured with $220.7 million in upfront reserves, DBRS said. That represents the whole amount of the deal's landlord obligations for costs such as tenant improvements, leasing commissions, free rent and gap rent.
The deal's sponsor is a joint venture between Tishman Speyer and Henry Crown affiliates, according to DBRS.
Billed as the largest private development in U.S. history, the 28-acre Hudson Yards site includes the Jacob K. Javits Convention Center, the High Line and retail space.
