Ceruzzi Properties Refinances Land Beneath NYC’s Iconic Lipstick Building

louis_ceruzzi_lipstick_buildingIf you squint at New York City’s Lipstick Building, from a distance, below, or a neighboring skyscraper, you get why hardly anyone calls it 53 at Third. The tiered, cylindrical structure really does resemble something you’d find at Sephora, only it’s 453 feet tall (and contains office space instead of wax, rouge, and cocoa butter).
My company Ceruzzi Properties recently refinanced land underneath the iconic building with a fixed-rate loan of $272 million from Credit Suisse (as reported by the Real Deal.)
We originally purchased the ground in 2016 at 883 Third Avenue in February 2016 for $453 million, while also assuming a $267.5 million loan which originated a decade ago with an above-market interest rate of 6.21 percent. This loan opened for pre-payment this April.
Both the original sale and the refinancing were organized by Holliday Fenoglio Fowler (HFF). According to HFF’s managing director, Christopher Peck, “This transaction is further evidence as to the strength of the debt capital markets when financing trophy-quality real estate for trophy-caliber borrowers… Not only was pricing incredibly strong, but Credit Suisse’s process was exceptional, closing a complex transaction within a very tight timeframe.”
With the Federal Reserve expected to raise interest rates twice this year, getting a fixed rate on the loan was a huge win for Ceruzzi Holdings and our partners. As I told the Wall Street Journal recently, there’s a lot of talk and action about the Fed raising interest rates. Had we done a floating-rate loan we would have definitely been subject to those increases.
It’s a huge win, then, that the refinancing deal remains fixed, avoiding penalties. Along with its partner SMI USA, we nailed down a fixed-rate loan from Credit Suisse at 3.35 percent with a four-year term. SMI USA—a real estate development, investment, and management firm based in New York—is the U.S. subsidiary of Shanghai Municipal Investment.
Ceruzzi Properties has a number of developments in the works, including a high-rise on East 50th St., luxury residences on East 86th, and a mixed-use condo and retail development on the corner of 43rd and Fifth. The Lipstick Building’s unique aesthetic aside, this purchase is the latest smart investment I have a good feeling will be worth more than its weight in makeup.

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