Newmark, serving as the exclusive advisor to Orda Management Corporation (Orda), is pleased to announce that it has closed $430 million in debt financing on 225-233 Park Avenue South in Manhattan. Jordan Roeschlaub led the Newmark team, which also included Steven Sperandio and Daniel Fromm, that brokered and structured the financing of the trophy asset.
The loan was structured as a ten-year, fixed-rate loan that is fully interest-only. Barclays provided the $430 million loan that replaced a $217 million loan from New York State Teachers’ Retirement System (NYSTRS). The funding allowed ownership to successfully recapture equity that was spent on the recent capital investment. Over the past 18 months, approximately $135 million was spent on an extensive capital improvement plan, which repositioned the building as the premier asset on Park Avenue South.
“I’ve spent the better part of three decades redeveloping and repositioning our two office buildings, and each transition has been remarkable; this one is the pinnacle. We are thrilled at what we’ve accomplished with the asset’s repositioning and ultimately its refinancing, and are extremely proud of our 225 team and our tenants,” said Orda Chairman Morton F. Silver.
The 675,000-square-foot, Class-A property, which features two contiguous buildings located in close proximity to Union Square, Gramercy Park, and Madison Square Park, was built in 1909 and is the top office asset on Park Avenue South. It is currently nearly 100% leased, with the only exception being a new, 580-square-foot space on Park Avenue South that connects to 8,000 square feet in the windowed lower level. The property boasts a unique history - after 9/11 in 2001, the Port Authority of New York and New Jersey immediately needed a new space, since they were previously located in the World Trade Center. A space was fitted out for them at the top of the building so they could move right in, and when they committed to moving to 4 World Trade Center in 2015, it opened the door for a complete repositioning of the asset. As a result, the buildings now feature a lengthy list of amenities, including three stylized lobbies; a 13th-floor rooftop garden and adjacent glass pavilion; a 14th-floor garden terrace; a 19th-floor, 4,000-SF, glass-enclosed courtyard; new mechanical systems; new elevators; and a large loading dock.
The capital improvement plan began with the gutting of the lobby and the addition of a brand-new, stone floor. The plan was also centered around creating green, outdoor spaces. While many of the buildings in the area, including this one, were simply painted over, the repositioning of the property involved taking the paint down to the limestone to restore the classic architectural look. The “industrial” atmosphere was enhanced by using intumescent coating on stripped, steel columns on the interior floors so the bolts on the columns are still visible, adding to the effect. The aforementioned roof garden encompasses a 9,000-square-foot roof with a 3,000-square-foot pavilion, which also added square footage to the building.
As the buildings climb higher towards the sky, the difference in floor heights is magnified - while the first few floors are similar in height, the higher floors vary - at 233 (the shorter, 12-story building), a “light court” was built, with a connection to 225 (the taller, 19-story structure). Facing east is a splendid glass wall, and the connection allows for true, usable square footage in the middle of the floorplate - supporting 27,000 and 40,000-square-foot floorplates in each building respectively. In 1982, Silver had the foresight to begin commissioning more full-floor tenants at the building, which allowed it to grow into a larger opportunity for higher-quality tenants. The tenant roster now includes top-tier organizations such as Facebook, BuzzFeed, T. Rowe Price and STV Engineering.
Another truly unique aspect of the property is the fact that each tenant essentially has their own elevator bank. One major technology firm, for example, enjoys a “building within a building,” with private elevator and lobby spaces. The property stands in such a location that allows for spectacular vistas and nearly 360 degrees of views which include Union Square, Gramercy Park, the Chrysler Building, the Brooklyn Bridge, the World Trade Center and more. The creation of a new cooling tower on the upper roof allowed for the creation of a courtyard on the 19th floor, which is a private space with the new, 4,000-square-foot courtyard surrounded by interior space (essentially 24,000 square feet of pavilion space). Additionally, the buildings’ proximity to Union Square makes it the perfect opportunity for technology-focused tenants, which benefit from the tech-centric hub featuring top talent. There is also a new restaurant being built in the corner across from the Union Square Café, which will be designed by David Rockwell.
“This Class-A property’s premier location on Park Avenue South, coupled with the extensive capital improvements and top-tier tenancy, allowed Orda to take full advantage of the debt markets,” said Roeschlaub.
“We are pleased Newmark and Barclays were able to structure a very accretive debt facility that recognized the upgraded asset’s profile,” added Orda President Tommy Silver.
About Orda Management Corporation
225 Park Avenue South was acquired by the 225 Fourth Company in 1954. The company was organized by Orda Management Corporation, which has managed the property ever since. Under the leadership of Morton Silver together with his son Thomas Silver and a skilled management team, Orda has diligently guided operations and development ever since. With a steadfast commitment to its tenants, Orda’s dedicated staff has focused on providing efficient office environments that blend historic distinction with modern Class A office space. Orda and its principals own, develop, and manage real estate primarily in the New York metropolitan area and make their offices at 225 Park Avenue South.
Newmark is one of the world’s leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, Newmark’s 14,100 professionals operate from more than 400 offices in established and emerging property markets on six continents.
With roots dating back to 1929, Newmark’s strong foundation makes it one of the most trusted names in commercial real estate. Newmark’s full-service platform comprises BGC’s real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing; capital markets services, including investment sales, debt placement, appraisal, and valuation services; commercial mortgage brokerage services; as well as corporate advisory services, consulting, project and development management, and property and corporate facilities management services. For further information, visit www.ngkf.com.
Newmark is a part of BGC Partners, Inc., a leading global brokerage company servicing the financial and real estate markets. BGC’s common stock trades on the NASDAQ Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC also has an outstanding bond issuance of Senior Notes due June 15, 2042, which trade on the New York Stock Exchange under the symbol (NYSE: BGCA). BGC Partners is led by Chairman and Chief Executive Officer Howard W. Lutnick. For more information, please visit www.bgcpartners.com.