A consortium comprising PGIM, Tribeca Investment Group, and Meadow Partners has closed US$228.9 million in financing to refinance a recently upgraded 19-storey office building in Manhattan's Midtown South district. Rialto Capital Management, as part of a joint venture partnership with Hines, provided the industry-standard, interest-focused bridge financing for the property known as 295 Fifth Avenue, also referred to as the Textile Building.
The transaction took place just under four years after the 707,181 square foot building's last refinancing in November 2022, which at the time included US$150 million from Deutsche Pfandbriefbank. The process for securing this new financing involved submitting half a dozen proposals and culminated in a competition between Rialto with its joint venture partner Hines and another 'massive balance sheet financier', according to a source familiar with the transaction.
Positive Development Despite Office Market Challenges
The building is currently approximately 50 percent occupied and is well on its way to stabilisation. The recently completed renovations have generated positive momentum, according to the source. This upgrade is an important factor as the office market, particularly in established locations like Midtown South, continues to adapt to new requirements.
The office tower, strategically located between 30th and 31st Streets, has already secured significant leases following its modernisation. In September 2024, hedge fund Bridgewater Associates secured 60,000 square feet of space. Previously, in November 2023, a 132,000 square foot lease was signed with the renowned law firm Quinn Emanuel Urquhart & Sullivan.
Dustin Stolly, Senior Managing Director of Capital Markets Institutional Advisory at Walker & Dunlop, commented on the transaction: "295 Fifth Avenue embodies the type of high-quality, well-positioned office asset that continues to draw strong tenant demand in Midtown South." He added: "With its premier tenancy and location in one of Manhattan's most active and supply-constrained office submarkets, the property is excellently positioned to benefit from the ongoing demand for top-tier office space." Walker & Dunlop, with a team from its Institutional Capital Markets Advisory, led the negotiation of the debt financing and the assembly of a consortium of leading financial institutions.
- —The property 295 Fifth Avenue, also known as the Textile Building, was refinanced with US$228.9 million.
- —Key players include PGIM, Tribeca Investment Group, Meadow Partners, Rialto Capital Management, and Hines.
- —Significant leases with Bridgewater Associates and Quinn Emanuel Urquhart & Sullivan were concluded after the renovation.
- —The financing was arranged by Walker & Dunlop and highlights Midtown South's continued attractiveness to investors.
