To help secure the deal, GFI and HRA refinanced its existing bank loan and increased the lending facility on the property to $130 million, according to the company.
In the end, the TI deal not only stabilizes GFI’s plans to convert 470 Vanderbilt into an operational office building, it also allows the firm to proceed with its plans to build a 350-unit rental building next to project.
“It was a very unique deal structure, it is the first time the city has done it. Now I think that they got it done successfully, I expect to see them replicate it,” said Steven Hurwitz, vice president of acquisitions and developments at GFI.
The experience left Mr. Hurwitz better prepared to handle a deal of this nature the next go-around.
“This was super challenging,” Hurwitz, 33, added. “This was the most challenging deal of my career.”
In 2007, GFI paid $45 million to the The Carlyle Group for the ground lease to the 650,000-square-foot property.
The building has since become a city agency magnet. It signed the New York City Housing Authority to a 62,000-square-foot lease in 2009.
The building currently has 70,000 square feet available at the top four floors of the property – in addition to 15,000 square feet of retail space at the ground floor.
The asking price is $32 per square foot, Mr. Hurwitz said.
HRA will be ditching three of its current offices for the move, including offices at 330 W. 34th Street and 2 Washington Street. All told, the company will be shrinking its total office space by 95,000 square feet – saving an estimated $7 million per year, said an HRA spokeswoman.
The agency is expected to move into 470 Vanderbilt in winter 2012.