ARC New York City REIT Secures $140 Million Barclay’s Loan
American Realty Capital New York City REIT Inc., a publicly registered non-traded real estate investment trust sponsored by AR Global, entered into a loan agreement with Barclays Bank PLC for $140 million.
The loan is secured by a mortgage on the company’s 545,000-square-foot office property located at 123 William Street in downtown Manhattan, which the REIT purchased in March 2015 for $253 million.
The loan bears interest at a rate equal to 4.666 percent and requires monthly interest payments, with the principal balance due on the maturity date of March 6, 2027.
A portion of the proceeds was used to repay the approximately $96 million outstanding principal balance on the existing mortgage loan secured by the property. In connection with the financing of the loan, the REIT paid its advisor, New York City Advisors LLC, a $1.1 million financing coordination fee
The loan agreement requires that the REIT’s operating partnership maintain, on a consolidated basis, a minimum net worth of $100 million and a minimum liquidity of $5 million. The loan may be accelerated only in the event of a default and may only be prepaid prior to December 6, 2026 upon payment of a penalty based on a yield maintenance formula of not less than 1 percent of the principal amount being repaid.
American Realty Capital New York City REIT invests in properties located in the five boroughs of New York City, with a focus on Manhattan. The company closed its initial public offering in May 2015 and has raised a total of $760 million in investor equity, as of September 30, 2016. The company owns six properties valued at $785 million, and in October 2016, the company’s board approved an estimated net asset value of $21.25 per share.
