What’s the Deal

A roundup of real-estate news in the Greater New York area

The owner of 590 Madison Ave. is refinancing its mortgage.
Photo: Peter J. Smith for The Wall Street Journal

Oct. 4, 2015 7:49 pm ET

MIDTOWN EAST

Trophy Tower Owner Opts for a Refinance

The owner of the office tower formerly known as the IBM Building has decided to refinance the mortgage on the property instead of sell a minority stake in it.

The State Teachers Retirement System of Ohio, which owns 590 Madison Ave. in the high-end Plaza District, secured a fixed-rate $650 million senior mortgage loan from Goldman Sachs Mortgage Co., according to Cushman & Wakefield, which represented the pension fund and arranged the financing.

STRS Ohio had explored selling a minority stake in the trophy tower about a year ago but opted to refinance its mortgage. It will use the new 10-year loan to retire the previous $350 million mortgage two years early to take advantage of historically low interest rates, a spokesman for STRS Ohio said. He didn’t release details on the interest rate.

Other building owners are adopting a similar strategy. “Many owners like where interest rates are today and worry there could be an increase on the horizon,” said Steve Kohn, president of Cushman & Wakefield Equity, Debt & Structured Finance.

Mr. Kohn, Alex Hernandez, Chris Moyer and Alex Lapidus represented STRS Ohio.

To Read the Full Story