Morgan Stanley has provided a $140.5m loan to New York-based real estate investment firm Savanna for the refinancing of 31 Penn Plaza in Midtown Manhattan.
The two-year (with three one-year extension options) floating rate loan carries an initial coupon under 2%, Kelly Gaines, a managing director at Jones Lang LaSalle who led the financing, told Real Estate Capital.
The JLL team, which included vice president Aaron Niedermayer, assisted Savanna in defeasing a previous $89m CMBS loan, taking advantage of lower interest rates and “lowering their financing costs dramatically,” Gaines said.
The loan includes prepayment options and also the option for a $28m expansion, giving the firm the flexibility to potentially sell the office property or buy the ground lease.
“The deal showed that in certain situations it does make sense to defease loans, depending on the strategy of the owner,” Gaines said.
The 18-story, 444,132 sq ft office building, on 31st Street between Sixth and Seventh Avenues, is less than one block away from Penn Station in Manhattan’s Penn Plaza submarket. Since 2011, JLL’s Agency Leasing team has leased more than 225,000 sq ft of office space at the property.