Bond Sale Tied to Aby Rosen’s 475 Fifth Ave Shelved
Aby Rosen’s plan for a bond sale tied to the mortgage of an RFR Midtown office building was disrupted by an unforgiving interest rate environment.
The $175 million offering attached to 475 Fifth Avenue was postponed, Bloomberg reported. The bond was expected to be priced several weeks ago before the delay.
RFR and Pacific Coast Capital Partners were sponsoring the offering, which was being marketed by Mesirow Financial. The offering included a $74 million, AAA-rated tranche that carried a spread of roughly 1.80 percentage points over the benchmark, according to a presale report from Morningstar DBRS.
Mesirow declined to comment, while RFR and PCCP did not immediately respond to requests for comment.
RFR recapitalized the property last February after facing a foreclosure threat from its lenders. Rosen’s firm scored a three-year, $160 million loan for the 23-story building, as well as an equity infusion from unnamed partners.
JPMorgan Chase and Citigroup provided the financing, replacing a $180 million existing mortgage it had on the property. The banks previously moved to foreclose on RFR’s initial mortgage in the summer of 2024 after part of the landlord’s debt matured.
RFR teamed up with Penske Media Corporation to purchase 475 Fifth Avenue in 2022 from Nuveen Real Estate for $290 million; the media publisher contributed 50 percent of the equity in the partnership. Penske is the building’s largest tenant and is committed to the property for the long haul.
The acquisition was financed by a $260 million loan. JPMorgan and Citigroup were responsible for the senior mortgage, while PCCP provided the mezzanine debt.
As of the beginning of September, the property was 93.4 percent occupied, according to the Morningstar report.
The scuttled offering demonstrates the difficulty of securing investors for even the safest perceived commercial real estate debt. PIMCO expects losses above $35 million on its $58 million AAA-rated debt slice following the sale of Centre Square in Philadelphia, representing a rare loss at the AAA level for CMBS debt.
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