SL Green Secures $1.3B Mortgage Extension for NYC Tower
SL Green Realty Corp. and its joint venture partners have closed on a $1.25 billion mortgage modification and extension for One Madison Avenue, a 27-story office building in Manhattan.
The firms extended the final maturity date through November 2027, maintaining the interest rate at 3.10 percent over term SOFR, with a further reduction in spread when specific leasing thresholds are exceeded. Wells Fargo Bank led the facility of 14 global banks.
Designed by renowned architect Kohn Pedersen Fox, One Madison Avenue embraces the new standard for the modern work experience, using an ambitious adaptive reuse project. Its tower floors and retail spaces are 100 percent leased, and the property is more than 65 percent leased overall.
Tenants include Franklin Templeton, Coinbase, Palo Alto Networks and IBM, which moved into its new corporate headquarters in September. Additional tenants will be moving in throughout 2025.
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They take advantage of a property that emphasizes wellness by providing an HVAC system that circulates 100 percent fresh air, expansive floor-to-ceiling windows with heavy doses of natural light and nearly column-free spaces that maximize workspace efficiency.
Lenders understand the asset’s value
“Manhattan’s leading office properties continue to draw companies that value the local work ethic and culture,” Lisa Flicker, senior managing partner ‑ head of real estate, Jackson Lucas, told Commercial Property Executive.
“Teams based in the city work longer hours with greater intensity, contributing to a unique drive that’s hard to replicate elsewhere,” Flicker said. “While relocating teams may enhance quality of life, it often diminishes productivity and tenacity, creating a trade-off. I wouldn’t bet against premium assets in NYC—as it remains the hub where ambitious talent and top-tier workplaces converge for success.”
The transaction proves that the lenders understand the underlying asset’s value, according to David Curry, Farrell Fritz, P.C.
He told CPE that the “return to the office” movement is happening slowly, and this type of Class A space “with world-renowned landlords such as SL Green” is leading the way.
“It is encouraging to see lenders making deals that make sense with borrowers who have shown them a history of living up to their promises,” Curry said. “Hopefully, deals such as this will encourage borrowers and lenders to return to the table to ink longer-term deals.”
He said the issue remains: What about the Class B and Class C office space?
“These owners—and the lenders that have provided financing to them—are in for a tougher road, as values have declined, and rates are at their highest in several years.”
According to Curry, these buildings need to be upgraded to include some of the features that Class A buildings have, making them more attractive, which further hinders sensible financing deals.
Last month, SL Green Realty sold an 11 percent ownership interest in One Vanderbilt, its 1.7 million-square-foot Manhattan skyscraper. SL Green will continue to own a 60 percent stake in the 59-story tower that was fully leased at closing.
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