Dealmaker: Paramount Group Completes $760M in Office Transactions
Paramount Group, New York, completed the $300 million refinancing of 712 Fifth Avenue, a 543,000-square-foot Class A office building in Midtown Manhattan. 
Eastdil Secured LLC, New York, arranged the new 10-year interest-only loan at a 3.39 percent fixed rate. Paramount used the net proceeds to repay an existing $246.5 million loan at 4.41 percent. That loan was scheduled to mature in March 2018.
Paramount Group Executive Vice President and Chief Financial Officer and Treasurer Wilbur Paes said the company has reduced its weighted-average borrowing costs by more than 185 basis points over the past two years and now has no debt maturities until late 2021.
Paramount Group also sold Waterview, a 24-story Class A office building in Rosslyn, Va., for $460 million. The company intends to use transaction proceeds to repay loans on two other Washington, D.C. office properties: 1899 Pennsylvania Avenue, NW and Liberty Place.
The Washington Business Journal reported Morgan Stanley Real Estate, New York, acquired the 647,000-square-foot asset. The property is currently 99 percent leased to a single tenant whose lease will not expire until 2028.
The sale will result in a nearly $110 million financial statement gain and a $393 million tax gain for Paramount, which will be deferred in a like-kind exchange for the acquisition of One Front Street, a 38-story San Francisco office property.
“By recycling the capital from this stabilized asset into our recent, more accretive, One Front Street acquisition, we believe shareholders will benefit from our team’s ability to add value by capitalizing on expiring leases that are 20 percent below market,” said Paramount Group Chairman, CEO and President Albert Behler.
