Rithm Capital is nearing its biggest debt deal since acquiring Paramount Group, but it’s taking a significant infusion of the company’s own equity to secure.
Rithm is set to land a $415 million commercial mortgage-backed securities loan for 31 West 52nd Street in Midtown Manhattan, Bisnow reported. The landlord is also securing $85 million in mezzanine debt, according to a Fitch Ratings report.
Wells Fargo, Bank of America, Barclays, Citi Real Estate Funding and Goldman Sachs are originating the replacement for the existing $500 million loan. The refinancing is expected to close next week.
To score the loan — complete with a 6.85 percent interest rate and a December 2029 maturity date — Rithm is contributing $72.5 million of equity into the deal through its office subsidiary, Elecor Properties. It will also set aside nearly $43 million in reserves for leasing commissions and capital improvements.
Rithm didn’t respond to the publication’s request for comment.
Prior to the sale of Paramount, commercial brokerage Cushman & Wakefield signed a lease for 130,000 square feet at the 29-story property, which is 86.5 percent leased. Approximately 41 percent of the building’s leases are due to expire at the end of the decade, including those of law firm Pillsbury Winthrop Shaw Pittman and financial planner Centerview Partners, the third- and fourth-largest tenants, respectively.
Tenants are paying an average of $81 per square foot for space at the building, well below the average asking rents in the surrounding area.
The looming refinancing follows a similar move in the spring, when Rithm landed a $282.5 million refinancing loan at 1325 Sixth Avenue led by JPMorgan Chase. The deal represented the first large capital markets transaction since taking control of Paramount.
As of January, that 34-story, 825,000-square-foot property in Midtown Manhattan was 90 percent leased. The building’s most recent appraisal came in at $395 million.
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