Liberty bonds refinanced for Blackstone’s luxury apartment tower
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Blackstone Inc. is refinancing $550 million of municipal debt for 8 Spruce St., a 76-story residential tower in downtown Manhattan designed by famed architect Frank Gehry.
New York City’s Housing Development Corp. priced the debt Tuesday on behalf of Blackstone, which purchased the building for $930 million from Brookfield Asset Management Inc. and Nuveen LLC in 2022.
About $204 million of the securities are tax-exempt and are issued under the Liberty Bond program, part of a federal economic package approved in 2002 to help lower Manhattan recover from the 9/11 terrorist attacks.
The initiative allocated $8 billion of tax-exempt financing, with the biggest chunk — $3 billion — going to developer Larry Silverstein to rebuild the World Trade Center site. Goldman Sachs Group Inc. and Bank of America Corp. also used the program to finance the construction of their New York City headquarters.
Bank of America is the lead manager of the bond sale. A spokesperson for the bank declined to comment.
8 Spruce, formerly known as Beekman Tower and later rebranded, was built by Forest City Ratner, a real estate development company. Forest City received approval to issue Liberty Bonds in 2008 – the
The Liberty Bonds were previously refinanced in 2014. Those securities were issued as interest-only, with that period ending in November 2024,
Standing 870 feet high, 8 Spruce is known for its rippled stainless steel and glass exterior with floor-to-ceiling windows. The building has 900 units, including two units reserved for Gehry, whose most famous works include the Guggenheim Museum Bilbao in Spain and the Walt Disney Concert Hall is Los Angeles.
Individual units include Douglas fir cabinetry, wine fridges and sweeping city views. Residents also enjoy an outdoor sundeck, screening room, golf simulator, indoor pool, and fitness center complete with a sauna, yoga room and spin studio.
“Frank Gehry’s 8 Spruce Street is an iconic building that offers its residents unique amenities at their doorstep,” a Blackstone spokesperson said in an emailed statement. “The significant demand for this refinancing reflects the high-quality nature of the property.”
As of August, the building was about 97% occupied with an average monthly base rent of $6,015, according to Moody’s Ratings. The tower, which was appraised by the city at $802 million, received a 20-year tax abatement.
New York City’s housing agency is issuing the bonds as fixed-rate debt with multiple classes, similar to the way commercial mortgage backed securities are structured.
Three classes of taxable debt have higher payment priorities than the tax-exempt Liberty Bonds. Moody’s rates five classes of debt with grades ranging from Aaa to Baa3. The sixth class of securities is unrated. All the bonds mature in 2031.
The highest-rated tax-exempt piece, the Baa1-rated $25.5 million Class D series, was priced at par with a 4% coupon,
