(Bloomberg) -- Aby Rosen and Michael Fuchs, co-founders of real estate investment firm RFR Holding, are close to finalizing a $1.2 billion commercial mortgage backed security that would help refinance debt tied to the Seagram Building, a 38-story tower on Park Avenue in Midtown Manhattan.
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The CMBS is being pitched to investors in seven distinct portions, or tranches, with the highest rated AAA by Kroll Bond Rating Agency and Fitch Ratings. Pricing is expected to be finalized next week, according to people familiar with the transaction.
The tower is the latest in a series of well-known New York City office buildings that bond investors are sinking money into amid a surge in interest for marque properties in the city. In October, debt backing Rockefeller Center was refinanced as part of a $3.4 billion CMBS, and in January the Spiral office tower was refinanced in a $2.7 billion CMBS.
Proceeds from the CMBS will be used to repay debt that RFR had taken out against the property, including a mezzanine loan from JVP Management, according to people familiar with the matter.
Representatives for RFR, JVP, and Morgan Stanley, the lead bank on the deal, declined to comment. Real estate investment bank Eastdil Secured is advising RFR on the refinancing.
The Seagram Building was constructed in 1958 to serve as the corporate headquarters of distillery company Joseph E. Seagram & Sons. It was designed by architect Ludwig Mies van der Rohe.
A property appraisal by Newmark conducted in January valued the building at $1.825 billion, according to the Kroll report.
The top five tenants at the Seagram Building are alternative investment firms Blue Owl and Centerbridge Partners, retirement services provider TIAA of America, private equity firm Advent International and real estate lender Arbor Realty Trust. Together, they are occupying over half of the property’s square footage, the report said.
(Updates with details of CMBS proceeds in fourth paragraph.)
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