Meridian Capital Group negotiated $130 million in new financing for The Paramount Building on behalf of the building’s owner, Paramount Leasehold, LP.
Avison Young serves as the exclusive office leasing agent for the iconic tower, located at 1501 Broadway in Times Square, and is advising ownership on a major strategic reinvestment program for the building.
The 10-year, full-term interest-only loan features a low annual fixed-rate of 3.16% and was provided by Cantor Commercial Real Estate.
Meridian senior vice president Keith Kurland and managing director Aaron Appel, both based in Meridian’s New York City headquarters, originated and negotiated the transaction.
“The sponsor sought a flexible, long-term, fixed-rate financing solution to provide the necessary capital to reposition this landmark asset,” said Kurland.
“Through a tightly-managed marketing and negotiation process, we were not only able to achieve their objectives in this regard, but also procured the lowest spread and fixed-rate on a deal of this magnitude post-Lehman.”
Kurland added, “Meridian was able to quickly benchmark and drive this transaction to these unprecedented levels by leveraging our strong and long-standing lender relationships, along with our unique perspective having financed a significant number of buildings in the Times Square bow tie.”
The financing will facilitate ownership’s plan to invest more than $50 million to execute an improvement program at the 33-story, 788,000 s/f building.
The planned renovations are designed to enhance the tower’s ability to effectively support the business operations of modern tenants, particularly creative office and technology users.
“The strategic renovations we are making at The Paramount Building will serve to elevate the tower’s competitive edge and reflect our dedication to the high-quality maintenance of this iconic property,” commented William Farber, co-managing partner of Paramount Leasehold.
“Tenants will benefit from a more modern and efficient work environment that still embraces the building’s rich history.”
The Avison Young team advising building ownership consists of Arthur J. Mirante, II, principal and Tri-State president; Michael Gottlieb, Whitney Meyer, and Thomas Hines. Avison Young’s Edward Walsh, managing director of project management, and Joseph Polise, director of construction, are also part of the team. Tobin | Parnes Design Enterprises is the architect for the project.
Planned enhancements to the tower include renovations to the lobby to facilitate better flow of tenants and visitors,floor-by-floor renovations to update the common areas and bathrooms, upgraded elevator system, new windows and base-building systems.
Ownership is considering a new additional entrance on 43rd Street that could include a third floor sky lobby that reconnects the tower’s elevator banks.
Additionally, ownership has received approval from the Landmarks Preservation Commission for the building to add two new marquees and exterior signage on 43rd Street.
“Thanks to ownership’s commitment to reinvest in the building, 1501 Broadway’s market position will be further enhanced to attract a wide range of tenants seeking an exciting combination of modern, up-to-date amenities, a premier Times Square location, and a landmark business address with unique historical charm,” said Mirante.
“When coupled with the building’s unparalleled access to mass transit, we are confident that the reinvestment strategy will drive even more leasing activity.”
Added Gottlieb: “The tower offers unique opportunities for tenants that have varying space requirements, including an option for column-free office space with 20-foot ceiling heights and a floor containing architectural design features unlike any other space in Midtown. We also have the ability to offer smaller tenants a full-floor identity on the upper floors and can offer a large tenant highly-visible marquee signage on 43rd Street.”
The tower’s street level currently houses destination restaurants Hard Rock Café, Bubba Gump Shrimp and Carmine’s, among others, as well as major retail outlets for Levi’s, Lids and Yankee Clubhouse.
Built in 1926 as the East Coast headquarters for Paramount Pictures, the property had a long legacy of housing The Paramount Theater, which served as one of New York City’s premier entertainment venues for movies and live performances until it closed in 1964. Today, the building is home to a diverse mix of companies.
