The 15-year loan helped to finance the acquisition of the building that counts WeWork as its main tenant. Built in 1976, the building has seen two major refurbishments since its opening, most recently in 2015 when WeWork took occupation. WeWork is a market-leading provider of shared workspace and services for more than 90,000 members around the world.
“The growing demand for flexible space provides an interesting opportunity to finance a non-traditional office sector, particularly as PGIM continues to expand its debt offering,” said Aaron Knight, a director with PGIM’s London office who led the debt transaction. “Given the improvements in the variety and quality of office space available, we expect Midtown to withstand any potential Brexit impact because of its diverse tenant mix, which also has strong ties to the resilient legal profession.”
The Midtown area has historically been a hub for law firms and the legal profession. However, a recent shift in occupier trends has brought technology and financial firms to the area and led to a more diverse range of office tenants. Fox Court is also set to benefit from nearby infrastructure projects, such as the development of London’s Crossrail, which should improve connectivity to the area as phased operations begin from late 2017.
“Our decision to proceed with PGIM for this financing was justified by the smooth and efficient process from start to finish that enabled our client to complete within the targeted timeframe and on very competitive terms,” said Adam Buchler, a principal with Buchler Barnett Spencer who advised the sponsor on the transaction.
"This transaction is an example of increasing demand in the market for core plus and value add properties," said Bryan McDonnell, a principle with PGIM's London office. "Borrowers who are faced with high single tenant concentratins and near term lease roll, or those seeking high whole loan leverage, are looking beyond the typical core lending market."
About PGIM Real Estate Finance, Inc.
PGIM Real Estate Finance, Inc. is a trade name of The Prudential Insurance Company of America, a wholly owned subsidiary of the U.S. financial services firm Prudential Financial, Inc. (NYSE: PRU). PGIM Real Estate Finance’s investments in commercial mortgage loans are managed by the real estate finance business of PGIM. This PGIM unit is an international full-service, commercial and multifamily mortgage finance business with more than US$88 billion in assets under management and administration as of December 31, 2016. Leveraging a 140-year history of real estate finance, the real estate finance business of PGIM offers one of the most comprehensive lines of real estate finance products and originates loans for Fannie Mae DUS®, Freddie Mac and specialized affordable housing programs; FHA; Conduit; PGIM Real Estate Finance’s general account; and other institutional investors. For more information about the real estate finance business of PGIM, please visit http://www.pgimref.com.
With 14 consecutive years of positive third-party institutional net flows, PGIM, the global asset management businesses of Prudential Financial, Inc. (NYSE: PRU) (“PFI”), ranks among the top 10 largest asset managers in the world, according to Pensions & Investment’s May 2016 Money Manager Survey, with more than $1 trillion in assets under management as of Dec. 31, 2016. PGIM’s businesses offer a range of investment solutions for retail and institutional investors around the world across a broad range of asset classes, including fundamental equity, quantitative equity, public fixed income, private fixed income, real estate and commercial mortgages. Its businesses have offices in 16 countries across five continents.
PFI’s additional businesses offer a variety of products and services, including life insurance, annuities and retirement-related services. For more information about PGIM, please visit http://www.pgim.com. For more information about Prudential, please visit www.news.prudential.com. Prudential Financial, Inc. of the United States is not affiliated with Prudential plc, which is headquartered in the United Kingdom.