Lance Capital, a New York-based company which provides
The tenant improvement facility is for $17.9 million, with the loan provided by Lance Capital and CGA Capital Corp. The borrower is Taconic Investment Partners and the tenant is the City of New York Human Resources Association.
It amortizes over seven years at a 4.25% interest rate. Lance said the unique feature of this transaction is that the building is not securing this loan; rather it is backed a portion of the rent cash flow.
Bonds tied to the facility were privately placed with an institutional investor and they implicitly carry the city’s AA rating.
The rate was made possible by focusing on the city’s creditworthiness, “rather than the building’s cost of capital or the security collateral value of tenant improvements,” said Richard Podos, CEO of Lance Capital. “We admire what NYC did by reducing square footage, consolidating services and contributing to urban revitalization at the same time, all in a better space.”
HRA will occupy three floors at the building; it is consolidating offices from three locations there.
“The TI financing is a major development that provides a new tool for borrowers to access a different source of real estate capital by focusing on a tenant's credit in a multitenant building,” Podos said. This kind of financing delivers a lower cost of capital to enable projects to move forward.
