T
ishman Speyer has secured a refinancing deal for the iconic Rockefeller Center, but it comes with some costly conditions. The company has partnered with Bank of America and Wells Fargo to issue a $3.5 billion commercial mortgage-backed securities loan, marking the largest CMBS transaction since April 2022 and the biggest ever for a single office asset.
The deal will refinance $3 billion in remaining debt on the property and allocate $246.8 million as a reserve budget to cover rents and services for tenants and landlords. Additionally, $179.8 million in equity will be returned to investors. However, the new loan's interest rate is 6.5 percent, higher than the initial 5.6 percent mortgage taken out nearly two decades ago.
The refinancing deal comes at a challenging time for New York City's commercial real estate market, but it reflects Rockefeller Center's resilience. The complex has maintained a high occupancy rate of 93 percent, surpassing other iconic office properties like the Chrysler building. Despite net rental revenue being 65 percent below 2019 levels, Tishman Speyer has continued to invest in the property, adding popular retailers and restaurants to enhance its appeal as a tourist destination.
The company's efforts have paid off, with the Landmarks Preservation Commission approving changes to the lower level of the complex in 2020. The deal marks another milestone for Tishman Speyer, which first acquired Rockefeller Center in a bankruptcy deal for $1.2 billion in 1995 alongside other investors.
