Fosun International is close to locking in a $900 million refinancing for 28 Liberty, a Financial District tower once hobbled by high vacancy after losing Milbank to Hudson Yards.Â
The three-year loan, disclosed by credit rating firm KBRA, suggests lenders still see more near-term risk downtown than in Midtown, where refinancings are typically landing five- to ten-year terms.
Fosun, which bought the former Chase Manhattan Plaza for $725 million in 2013, will contribute $78 million in fresh equity to close the transaction, Crain’s reported. The 2 million-square-foot property was recently appraised at $1.35 billion.
Fosun did not respond to the outlet’s request for comment.
The deal marks a vote of cautious confidence in Lower Manhattan’s long-suffering office market, which is showing signs of life after years of tenant flight.
Fosun, a Hong Kong-based conglomerate listed on the HKEX, has poured more than $550 million into upgrades, including a landscaped plaza anchored by a 43-foot David Rockefeller-commissioned sculpture. Average rents hover around $68 per square foot, which is relatively cheap for Class A space with direct access to six subway lines, four of them express.
The tenant roster has shifted since Milbank’s exit. The New York attorney general’s office anchors 20 percent of the building under a lease through 2038, joined by others such as Strip and the London Stock Exchange. With those moves, vacancy has fallen to 8 percent, down from roughly 15 percent four years ago.
Fosun reportedly was interested in selling the 60-story property for $1.6 billion in 2016, but the company refuted those suggestions.
Overall vacancy in the Financial District has declined for six straight quarters, hitting 22.8 percent midyear, according to the Alliance for Downtown New York. The World Trade Center and nearby properties like 100 Pearl and 225 Liberty are nearly full, while conversions and growing residential density are breathing life into the streetscape.
— Holden Walter-Warner
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