Dealmaker: Paramount Completes $850 Million New York Financing

Paramount Group, New York, completed an $850 million refinancing of 1301 Avenue of the Americas, a 1.8-million-square-foot Midtown Manhattan office building. 

The five-year interest-only loan matures in October 2021. It included two one-year extension options and has a 2.77 percent initial weighted-average interest rate based on a $500 million fixed-rate tranche at 3.05 percent and a $350 million tranche that floats at LIBOR plus 180 basis points, which equaled 2.36 percent at closing. 

The real estate investment trust used some proceeds to repay its 2017 debt maturities at 900 Third Avenue in Midtown Manhattan and Waterview, a 24-story Arlington, Va. office property, including swap breakage, defeasance and other closing costs. 

AXA Equitable Life Insurance Co., Paris, arranged the loan through its advisors Quadrant Real Estate Advisors LLC, Alpharetta, Ga.; MetLife Real Estate, New York; and New York Life. Cushman & Wakefield Equity, Debt & Structured Finance, New York, advised Paramount on the transaction.

“By capitalizing on today’s attractive credit markets for our Class A assets, we strengthen our balance sheet,” said Paramount Chairman, CEO and President Albert Behler. 

Paramount CFO Wilbur Paes noted that the REIT has financed more than $2 billion at currently low rates over the past 10 months. “As a result, we have not only significantly lowered our weighted-average borrowing costs and extended our debt maturities but have also strategically laddered them to minimize future refinancing risk,” he said.