Refi of the Spiral Returns Nearly $1B to Developers
Tishman Speyer, along with co-developer Chicago-based Henry Crown, have secured a $2.85 billion refinancing of The Spiral at 66 Hudson Boulevard, which has an alternate address of 509 West 34th Street. Lenders JPMorgan Chase, Bank of America, Goldman Sachs, and Wells Fargo provided the loan that refinanced $1.55 billion of existing debt and consolidated it with $1.695 billion in new debt according to city records. Press in early January indicated that the 5-year loan was expected to carry a fixed interest rate of 5.85%. Proceeds from the loan that closed on January 9th are to be used pay to off a $1.4 billion construction loan and retire $200 million in EB-5 financing, with $967 million will go to the developers, reducing their remaining investment in the building to $740 million according to reported Morningstar information. The building currently benefits from a property tax discount known as a payment in lieu of taxes (PILOTS) that expires in 2041. “Granted by the city many years ago to incentivize developers to build on what had been a rail yard” the abatement will reportedly reduce this year’s property tax bill by an estimated $15 million, increasing to an abatement of $33 million in 2030 as the expected value of the tower rises. Opening in 2023, the building has attracted several big block tenants, starting with the 2018 pre-construction commitment by pharmaceutical firm Pfizer for 800,000 square feet to serve as the building’s anchor tenant. Additional lease highlights include multiple 20-year deals by law firm Debevoise & Plimpton, finance firm TP, HSBC, and Investment management firm AllianceBernstein for 530,000 square feet, 299,893 square feet, 265,000 square feet, and 189,000 square feet respectively, bringing occupancy in the 2.8 million-square-foot tower to 94%.