In one of the biggest CMBS deals the city has seen since the start of the recession, Meridian Capital Group has arranged a $100 million refinancing for the retail condominium that’s home to Barney’s flagship store on Madison Avenue.
"This transaction’s size and structure are highly indicative of the re-emergence of the large loan and CMBS markets," said Ronnie Levine, the Meridian managing director who negotiated the loan.
The $100 million CMBS loan was arranged for Flagship Partners LLC which owns the 265,000 s/f retail condominium at 660 Madison Avenue, on the corner of 61st Street.
The loan is expected to be contributed to a U.S. conduit offering that will price later this summer. Meridian negotiated the new 10-year fixed-rate loan at what it called a "favorable" rate, through Citi Global Markets.
"Meridian was able to quickly evaluate our client’s financing options, vet the loan to our broad national network of capital providers, and develop an effective solution tailored to our client’s financing needs," said Levine.
"This is not a transaction that could have happened so quickly even six months ago."
660 Madison, which was built in 1958, is located in the heart of the Plaza District in midtown. With its prominent location and tenants, the building is among the most highly regarded properties in the area.
Flagship Partners — and investor group led by Ben Ashkenazy — paid $175 million to purchase the New York condominium and two other Barney’s locations from Japanese retailer Isetan Co. in 2001.
Isetan took over the Barney’s New York real estate after the fashion retailer filed for bankruptcy protection in 1996 then leased the store sites back.
In true cyclic form, the company founded on the sale of cheap suits by Barney Pressman in 1923, is facing another brush with bankruptcy after a takeover by Dubai World affiliate Istithmar left it loaded with debt just ahead of a global economic meltdown.
According to published reports, Barney’s is currently weighing a debt restructuring or bankruptcy filing.
The company has said it expects 2010 to be a stronger year in luxury retail sales and noted a 50% increase it is online business this year.
The retailer occupies its space at 660 Madison under a triple-net lease that runs for approximately nine years.