Manhattan office tower purchase is priciest ever backed by CMBS

Ivanhoé Cambridge and partner Callahan Capital Properties' $2.2bn purchase of 1095 Sixth Avenue (3 Bryant Park) in Manhattan earlier this month was the priciest acquisition of a single US office building ever funded with a CMBS deal. The deal was reportedly backed by a $1.3bn fixed-rate, standalone CMBS loan originated by Deutsche Bank.

Ivanhoé Cambridge and partner Callahan Capital Properties’ $2.2bn purchase of 1095 Sixth Avenue (Three Bryant Park) in Manhattan marked the priciest acquisition of a single US office building that was financed with a CMBS deal.

Screenshot 2015-01-27 at 1.01.12 PMThe deal was backed by a $1.3bn fixed-rate, standalone CMBS loan originated by Deutsche Bank.

The acquisition, which closed earlier this month, was the second priciest purchase of a single US office building since Boston Properties and its partners bought the GM Building for $2.8bn in 2008.

The GM deal was not financed with CMBS, real estate data firm TREPP confirmed. The $2.8bn purchase price consisted of approximately $890m of cash and the assumption of $1.9bn of secured and mezzanine loans, in addition to the issuance of 102,883 common units of limited partnership interest in Boston Properties Limited Partnership to the seller, according to a statement released at the time of the acquisition.

The seller of Three Bryant Park (as the new owners have renamed it), Blackstone, acquired the skyscraper through its $39bn takeover of Sam Zell’s Equity Office Properties Trust in 2007. The firm completed a reported $300m in renovations before word broke last summer that it was looking to sell. Renovations included a new lobby, building façade, expanded retail and public areas.

The 1.2m sq ft trophy tower, located between 41st and 42nd streets, is currently 97 percent leased to a tenant roster that includes MetLife, Verizon and Dechert.

“The opportunity to acquire a truly iconic property like Three Bryant Park is extremely rare,” said Arthur Lloyd, executive vice president of Global Investments at Ivanhoé Cambridge, in a statement announcing the acquisition.

“As we redeploy capital that has been rotated out of non-core assets globally, Three Bryant Park represents a cornerstone of our expanding U.S. office platform.

“It fits perfectly into our investment strategy of building a diversified portfolio of top-quality office properties in gateway U.S. office markets.” Commercial Mortgage Alert first reported that Deutsche Bank would fund the CMBS.

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