Owners put Paramount Plaza as collateral in $ 1.25 billion CMBS


The owners of the New York Paramount Plaza office tower are sponsoring a $ 1.25 billion cash commercial mortgage refinance for the famous Broadway district tower through a sale of loan-backed bonds.

BWAY Trust 2019-1633 is a single-asset, single-borrower securitization of a new mortgage on the 48-story tower located at 1633 Broadway. The 41-year-old building is home to the Gershwin Theater and its 16-year broadcast of the Broadway musical “Wicked”, as well as top tenants like Allianz, The Bleacher Report, New Mountain Capital and Warner Music.

The sponsor of the deal, the Paramount Group real estate investment trust (NYSE: PGRE), will repay more than $ 1 billion in outstanding debt and raise approximately $ 139.9 million in proceeds from the transaction involving the building on the west side of Broadway, according to a presale report from Kroll Bond Rating Agency.

The note offering will include a $ 1 billion Class A note (with a 2.99% coupon) as well as a $ 250 million Class B subordinate note, fully backed by a new mortgage of 1 , $ 25 billion subscribed by a consortium of banks: Goldman Sachs, JPMorgan, German American Capital Corp. of Deutsche Bank and Wells Fargo.

Paramount is located along one block along Broadway between West 50e Street and West 51st Street, at the north end of the touristy theater district. The building was originally constructed as the Uris Building, the headquarters of the former private New York real estate development company Uris Buildings Corp. It was renamed in the late 1970s when it was purchased by the current owners, according to Kroll’s report.

Paramount owns a portfolio of 18 office and retail buildings in New York, San Francisco and Washington, DC In New York, the company owns nine iconic buildings depicting the Manhattan skyline, including office buildings from class A located at 1301 and 1325 Avenue of the Americas.

Besides the Gershwin, Paramount Plaza also includes Circle in the Square Theater, a Broadway music destination.

The property was previously used as collateral in a 2002 CMBS securitization, which was repaid in 2012 with no realized loss, according to Kroll.

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