Paramount Completes $860 Million Refinancing of 1301 Avenue of the Americas

Rhea-AI Summary

Paramount Group, Inc. (NYSE: PGRE) has successfully completed an $860 million refinancing for its 1.7 million square-foot office building at 1301 Avenue of the Americas in Midtown Manhattan, which is currently 71.5% leased. The new five-year interest-only loan features a weighted average interest rate of 2.96%, consisting of a $500 million fixed-rate tranche at 3.11% and a $360 million variable rate tranche. This financing replaced an existing $850 million loan due in November 2021, enhancing Paramount's balance sheet and financial flexibility amid a strong New York City office market.

Positive

• Secured $860 million refinancing for 1301 Avenue of the Americas.
• Improved financial flexibility with a lower weighted average interest rate of 2.96%.
• Strengthened balance sheet by repaying the existing $850 million loan.

Negative

• Current occupancy at 71.5%, indicating potential leasing challenges.

Paramount Group, Inc. (NYSE: PGRE) (“Paramount” or the “Company”) announced today that it has completed an $860 million refinancing of 1301 Avenue of the Americas, a 1.7 million square-foot trophy office building, located between 52^nd and 53^rd Streets in Midtown Manhattan, that is currently 71.5% leased.

The new five-year interest-only loan has an initial weighted average interest rate of 2.96% and is comprised of a $500 million tranche that bears interest at a fixed rate of 3.11% and a $360 million tranche that bears interest at a variable rate of LIBOR plus 2.65%. The proceeds from the refinancing were used to repay the existing $850 million loan that was scheduled to mature in November 2021.

“With the refinancing of this high-quality Class A asset in today’s attractive credit markets, we have strengthened our balance sheet and improved financial flexibility,” said Wilbur Paes, Chief Operating Officer, Chief Financial Officer, and Treasurer of Paramount. “This transaction is a strong endorsement of the strength of the New York City office market and a testament to the confidence the capital markets have in our platform.”

About Paramount Group, Inc.

Headquartered in New York City, Paramount Group, Inc. is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York City and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210802005243/en/

FAQ

What is the significance of Paramount's $860 million refinancing for PGRE?

The refinancing enhances Paramount's financial stability and flexibility, allowing it to manage its debt more effectively.

What are the details of the new loan for Paramount Group?

The new loan includes a fixed-rate tranche of $500 million at 3.11% and a variable-rate tranche of $360 million, with a weighted average interest rate of 2.96%.

How does the refinancing affect Paramount Group's balance sheet?

By refinancing, Paramount strengthens its balance sheet, reducing its debt burden and improving financial ratios.

What is the current leasing status of 1301 Avenue of the Americas?

The building is currently 71.5% leased, which is relatively low for a trophy property.

How long is the new loan for Paramount Group?

The new loan is structured as a five-year interest-only loan.