SL Green Closes $2.0 Billion CMBS Refinancing on 245 Park Avenue, Led by JPMorgan

SL Green Realty Corp. (NYSE: SLG), Manhattan's largest office landlord, and its partner, a U.S. affiliate of Mori Trust Co., Ltd., announced Oct. 19 the closing of a $2.0 billion refinancing of 245 Park Avenue, a 44-story office tower in East Midtown. The five-year, fixed-rate single-asset, single-borrower (SASB) commercial mortgage-backed securities (CMBS) loan was led by JPMorgan Chase Bank, N.A., with participation from Bank of America, Deutsche Bank, Bank of Montreal, Goldman Sachs, Société Générale and Citibank.

The new financing replaces the property's previous $1.768 billion of mortgage and mezzanine financing. The prior capital structure consisted of approximately $1.2 billion of mortgage debt and $568 million of mezzanine financing. The new loan is about $232 million larger than the debt it replaces, before transaction costs and other adjustments.

Loan Terms and Pricing

The loan was priced at a spread of 147 basis points above the U.S. Treasury index, resulting in an interest rate of 6.52%. SL Green hedged its share of the financing to an effective interest rate of 6.37%. Measured against the property's roughly 1.8 million square feet, the $2.0 billion loan equates to approximately $1,111 per square foot.

The SASB structure ties the securitized loan to a single property and a single borrower. The syndicate for the financing includes JPMorgan as lead, with Bank of America, Deutsche Bank, Bank of Montreal, Goldman Sachs, Société Générale and Citibank participating.

245 Park Avenue: Property and Tenancy

245 Park Avenue is a 44-story, Class A office tower of approximately 1.8 million square feet that occupies an entire block between East 46th and East 47th Streets, directly across from Grand Central Terminal. The building is 100% leased, with a tenant roster that includes Société Générale, Ares Management, Houlihan Lokey, Carlyle and EQT Partners. Full occupancy was reached in September 2026.

SL Green assumed total control of the property in 2022 after the prior owner's bankruptcy. Rents were around $85 per square foot at that time, and the building is now fully leased at significantly higher rents following the repositioning. In its first-quarter 2026 earnings announcement, SL Green disclosed a 150,036-square-foot lease with a global investment firm at the property.

Redevelopment Program

SL Green, together with its partner and architecture firm Kohn Pedersen Fox, is carrying out a comprehensive redevelopment of the tower. The program includes two new lobbies, an expansive plaza renovation, a terra-cotta overclad of the Park Avenue facade, a fitness and wellness center, a rooftop amenity and a full modernization of the building's infrastructure. A restaurant component is also planned. Project cost estimates range from about $169.9 million to $225 million. Completion is expected in the first quarter of 2027.

"We set out to transform 245 Park Avenue into one of the most sought-after addresses in East Midtown, and the results speak for themselves," said Harrison Sitomer, President and Chief Investment Officer of SL Green. "The building is 100% leased at significantly higher rents than under prior ownership following a robust repositioning plan, and the strength of the capital markets for high-quality New York office is evident in this financing."

Part of SL Green's $7.0 Billion 2026 Financing Plan

The refinancing brings SL Green's $7.0 billion 2026 financing plan to near completion. Sitomer said the transaction generates incremental liquidity, strengthens the company's balance sheet and extends its debt maturities. SL Green had previewed the transaction in September, describing a planned loan of approximately $2 billion supported by significant pre-placement interest.

As of June 30, 2026, SL Green held interests in 54 buildings totaling 30.6 million square feet, including ownership interests in 29.2 million square feet and 1.4 million square feet securing debt and preferred equity investments, excluding fund investments. The company also managed four buildings totaling 0.9 million square feet owned by third parties.

Market Context

The transaction comes amid a bifurcated New York office market, in which high-quality, amenity-rich buildings near major transit hubs have generally been better positioned to attract tenants and financing than older, less differentiated offices. The 245 Park Avenue financing converts a capital structure that included mezzanine debt into a larger, fixed-rate securitized mortgage. The 6.52% coupon remains high relative to the low-rate environment that preceded the recent tightening cycle, and the loan's performance will depend on the building sustaining full occupancy and the rents needed to support the debt.

Sources

• SL Green Realty Corp. press release, "SL Green Refinances 245 Park Avenue for $2.0 Billion": https://slgreen.com/sl-green-refinances-245-park-avenue-for-2-0-billion/