Empire State Realty enters $715 million restated credit agreement

By Marisa Wong

Los Angeles, March 13 – Empire State Realty OP, LP and its general partner, Empire State Realty Trust, Inc., entered into a second amended and restated credit agreement on March 8 with Bank of America, NA as administrative agent, Wells Fargo Bank, NA and JPMorgan Chase Bank, NA as co-syndication agents, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement amends and restates Empire State’s amended and restated credit agreement dated Aug. 29, 2017 with Bank of America as administrative agent.

The new credit agreement is comprised of a $620 million senior unsecured revolving credit facility and a $95 million term loan facility.

The company may request that the facilities be increased through one or more increases in the revolver or one or more increases in the term loan or the addition of new pari passu term loan tranches, for a maximum aggregate principal amount not to exceed $1.5 billion.

The revolver matures on March 8, 2028 and may be extended by two six-month periods. The term loan matures on March 8, 2027 and may be extended by two 12-month periods.

Borrowings will bear interest at term SOFR plus a margin ranging from 130 basis points to 170 bps for revolving loans and 150 bps to 205 bps for term loans. In the event the company has obtained a certain investment-grade rating and elects such pricing, the margin will range from 72.5 bps to 140 bps for revolving loans and 80 bps to 160 bps for term loans.

The credit agreement also includes a sustainability component that can improve pricing upon the company’s achievement of certain sustainability ratings.

The facility fee on commitments under the revolver will range from 20 bps to 35 bps, or 12.5 bps to 30 bps if the company achieves investment-grade ratings.

The credit agreement contains a number of customary financial and operating covenants.

The facilities will be used for the working capital and for other general corporate purposes.

Wells Fargo term loan

Also on March 13, Empire State entered into a third amendment to its credit agreement dated March 19, 2020 with Wells Fargo Bank, NA as administrative agent.

The amendment provides for, among other things, some conforming changes to the BofA credit agreement, including increases to the capitalization rate for certain properties of the company. No other changes were made to the amount of the commitments, the maturity date of the outstanding loans or the covenants.

Based in New York, Empire is a real estate investment trust that owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area.

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