By Paulo Trevisani
The New York City Housing Development Corporation sold $550 million of bonds to refinance debt sold in connection with the development of 8 Spruce Street in Lower Manhattan.
The Multi-Family Mortgage Revenue Bonds Series 2024 were structured into six tranches, all of which mature in December 2031. The debt priced at par and pays interest at rates ranging from 4% to 6.433%. The class A, B and C of the securities are taxable and classes D, E and F are tax-exempt.
Investors will be repaid with money from tenant rents and associated revenue from the property.
Proceeds will refund prior bonds issued for the construction and equipping of the 76-story mixed-use skyscraper, located in Financial District near City Hall and the Brooklyn Bridge. The building has 896 residential units that are leased at market rates. It also has an ambulatory care center, a parking garage and a pre-K through 8th grade public school, which aren't part of the mortgaged property.
An appraisal of the building valued it at $802 million as of Oct. 1.
About 97% of the residential units in the building were leased as of Aug. 31. Construction on the property was completed in 2011. The borrower obtained a 20-year phased exemption from real estate taxes for the property. As a result, rents for all residential units in the building are subject to regulation for a 20-year period that ends June 30, 2031.
The building was designed by the architecture firm of Gehry Partners, according to the offering statement. That firm was founded by the architect Frank Gehry, whose other buildings include the Walt Disney Concert Hall in Los Angeles and the Guggenheim Museum Bilbao in Spain.
Moody's assigned different ratings for each class of debt, except Class F, which was unrated. Class A bonds were rated Aaa; Class B Aa3; Class C A2; Class D Baa1; and Class E Baa3.
BofA Securities, Goldman Sachs, Barclays and Wells Fargo were lead managers on the sale.
Write to Paulo Trevisani at paulo.trevisani@wsj.com
(END) Dow Jones Newswires
12-05-24 1402ET
