Hudson Bay lends $85M against a Microsoft lease in SoHo

Hudson Bay Capital has provided an $85 million loan to refinance 300 Lafayette Street, a seven-story COOKFOX-designed SoHo property whose credit case fits in a single sentence: Microsoft occupies all 63,000 square feet of office on floors two through seven under a long-term lease. InterVest Capital Partners sealed the refinancing, with Newmark's Jordan Roeschlaub, Nick Scribani, John Caraviello and Ryan Bub negotiating the debt.

Retail makes up the rest, 19,028 square feet across the ground floor and lower level, and Scribani called the building as good as boutique product gets in Lower Manhattan while saying lender interest was deep and competitive; Rob Rothschild, a managing director and head of real estate at InterVest, argued that buildings like this are nearly impossible to replicate at today's replacement costs. Both are the broker-sponsor form of underwriting, and on this asset the argument is credible because the lease came first, signed in March 2019 before construction finished, as Commercial Observer first reported at the time, which is how a 2019 building had its office floors committed before it opened.

What the $85 million prices is tenancy, not the submarket: across 63,000 square feet of leased office the loan works out to roughly $1,350 a foot, a basis only a credit tenant justifies, and the retail underneath would carry whatever residual risk a change in the office tenancy created. That retail is split across three names — Neko Health, New Era and Goldwin — so the ground floor does not rest on one covenant.

Office has found a clearance mechanism only where a trade prints: in September, a 93 percent leased South Bay tower took a larger loan, the selective clearing trade, and a $72.6 million Barings loan on a Needham office campus ran to the rule that office debt returns only after the trade prices. Here the debt carries the mark on its own, with no sale in the story, which leaves the pricing question for 300 Lafayette to one tenant's renewal decision.

The coverage does not disclose the coupon, the loan-to-value, the loan term, or the date Microsoft's lease rolls, and for a lease signed in March 2019 that last item is the number the next refinancing gets priced off. Until it surfaces, $85 million rides on a renewal decision with no disclosed deadline.