Wall Street Building Refi Comes with Steep Interest Rate Increase

Paramount Group and Singapore sovereign wealth fund GIC have secured refinancing for 60 Wall Street’s $575 million mortgage. News of the deal comes as work gets underway for a major $250 million redevelopment and renovation of the 47-story, 1.6 million-square-foot tower that has been vacant since 2021 upon full building tenant Deutsche Bank relocating to 60 Columbus Circle. Located within Lower Manhattan’s Financial District, a high office vacancy in the area resulted in the new mortgage carrying an elevated interest rate due to an elevated risk level. It is unclear which lenders originated the revised 5-year mortgage, but German lender Aareal Capital wrote the previous loan in 2017. The larger $316 million slice of the revised mortgage has a floating rate interest of 7.8%, while the remaining $259 million slice carries a 12% interest rate and is “a payment-in-kind loan (PIK), meaning if the landlords choose not to make monthly payments, then the unpaid obligation is added to the balance of the loan,” creating increased risk since “they allow borrowers to add more debt to their balance sheets and avoid paying their interest obligations in the short term.”

Source:    https://www.crainsnewyork.com/real-estate/paramount-group-lands-new-mortgage-60-wall-st-redevelopment#/