Refinances Midtown South Office Property, Capitalizing on Low Interest Rate Environment; Property is 100% Leased to Digitas, a Unit of International Advertising/PR Giant Publicis Groupe
NEW YORK, June 3, 2013 /PRNewswire/ — RFR Holding LLC, a fully integrated real estate investment firm based in New York City with a core focus on select urban markets in the United States and Germany, today announced the closing of $100 million of financing for 345 Park Avenue South. Through this 10-year CMBS transaction arranged by Citibank, RFR will defease existing debt on the property while taking advantage of low interest rates to reduce its cost of capital going forward.
345 Park Avenue South is an office property located in the Midtown South submarket of Manhattan. The office floors are 100% occupied by Digitas, a leading digital marketing firm owned by international advertising and public relations company Publicis Groupe. Initially drawn to the building by a sublease, Digitas developed a strong working relationship with RFR and subsequently executed a lease to expand to all of the office space in the building as it became available. The Digitas lease expires in November 2021, leaving approximately 8 years of term remaining. The street level retail space is occupied by two bank branches and a new restaurant, Manzanilla.
"This transaction exemplifies several trends we're seeing in the financing marketplace," said Jason Brown, Head of Acquisitions for RFR. "With strong sponsors like RFR, lenders are now willing to extend the term of the financing beyond the terms of existing leases. There's an understanding that groups with a track record of retaining and attracting tenants are likely to maintain stable performance in the future."
"We're also seeing investors and lenders increasingly drawn to core markets like Manhattan, and the Midtown South submarket has proven itself as the most attractive location for tech and media companies," said Mark Weiss, Chief Investment Officer of RFR. "In the context of the interest rate environment and our portfolio-wide strategy to limit rate exposure, refinancing made a lot of sense."
About RFR
RFR is a fully integrated real estate investment firm based in New York City with a core focus on select urban markets in the United States and Germany. Founded by Aby Rosen and Michael Fuchs in the early 1990's, the firm has been an active force in the New York City and German real estate market for much of the past two decades. RFR's portfolio has grown to include more than 100 properties located in select domestic and international markets. While its property portfolio is anchored in the Manhattan and key German commercial markets, RFR also has significant commercial, residential, hotel, and retail holdings. RFR has a proven track record of adding significant value to the properties it acquires through property-level repositioning and strategic financial engineering. RFR has created an organization with deep experience in all phases of the property life cycle and is positioned to take advantage of market opportunities.
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