Paramount Group has completed a $1.25 billion refinancing of 1633 Broadway, a 2.5 million-square-foot trophy office building located on Broadway between 50th and 51st Streets in Manhattan.
The new 10-year interest-only loan has a fixed rate of 2.99 percent and matures in December 2029. The proceeds from the refinancing were used to repay the existing $1.05 billion loan that bore interest at a weighted-average rate of 3.55 percent and was scheduled to mature in December 2022. The company realized net proceeds of approximately $179 million after the repayment of the existing loan, swap breakage costs and closing costs.
“With the office portion of 1633 Broadway now 100 percent leased, we took advantage of attractive credit markets to capitalize on our recent leasing success, improve the company’s debt maturity profile and increase our financial flexibility,” said Wilbur Paes, executive vice president, CFO and treasurer of Paramount. “Through this transaction we have effectively refinanced out equity proceeds, right-sized leverage on the asset, and added seven years of term, all while keeping annual cash interest unchanged. Our total debt stack now carries a weighted-average interest rate of 3.44 percent and a weighted-average maturity of over six years.”
