China Construction Bank contributes to the $232.3 million USD senior mortgage loan of a $299.9 million USD syndicated loan for the 110 William Street 2017 Refinancing Project

Project narrative

On March 6, 2017, Morgan Stanley Bank, N.A. and Morgan Stanley Mortgage Capital Holdings LLC entered into a $299.9 million USD syndicated loan agreement with KBS SOR SREF III 110 William, LLC — a Delaware-incorporated special purpose vehicle (SPV) and joint venture of Delaware-incorporated SREF III 110 William JV, LLC, a wholly-owned subsidiary of Savanna Investment Management, LLC (40% equity stake) and Delaware-incorporated KBS SOR 110 William JV, LLC, an indirect wholly-owned subsidiary of Maryland-incorporated KBS Strategic Opportunity REIT, Inc. (later renamed Pacific Oak Strategic Opportunity REIT, Inc.) (60% equity stake) — for the 110 William Street 2017 Refinancing Project. This loan carried a maturity period of two years and a final maturity date of March 7, 2019 with three one-year extension options (to March 2022) with monthly interest-only payments with the entire unpaid principal balance and all outstanding interest and fees due at maturity (a grace period equal to two years). This loan was divided into three tranches: a $232.3 million USD senior mortgage loan with an interest rate based on one-month LIBOR plus a margin of 2.2472% from Morgan Stanley Bank, N.A.; a $33.8 million USD senior mezzanine loan with an interest rate based on one-month LIBOR plus a margin of 6.25% from Morgan Stanley Mortgage Capital Holdings LLC; and a $33.8 million USD junior mezzanine loan with an interest rate based on one-month LIBOR plus a margin of 6.25% from Morgan Stanley Mortgage Capital Holdings LLC. The proceeds were used by the borrower to repay $156.0 million USD of a May 2014 mortgage loan for 110 William Street, a 928,000-square-foot, 31-story office building on approximately 0.8 acres of land in Manhattan, New York City, New York and for general corporate purposes related to it. At closing, $205.0 million USD was disbursed from the $232.3 million USD senior mortgage loan with $27.3 million USD remaining available for future disbursements to be used for tenant improvements, leasing commissions and capital improvements. $29.85 million USD had been disbursed under each the senior and junior mezzanine loan tranche with $4.0 million USD remaining available under each for tenant improvements, leasing commissions and capital improvements. In or prior to May 2017, the New York Branch of China Construction Bank Corporation (CCB) joined the syndicate as the Joint Bookrunner of the senior mortgage loan. In 2019, Invesco Real Estate issued a $349 million USD loan to refinance the 2017 loan for 110 William Street (that 2019 loan later defaulted in 2022).