Normandy completes $355m recap of Los Angeles office tower

The office building that houses NBCUniversal received an injection of new capital from Morgan Stanley Real Estate Investing.

Normandy Real Estate Partners has completed a $355 million recapitalisation on a Class A Los Angeles County office building that houses NBCUniversal thanks to a capital injection from Morgan Stanley Real Estate Investing (MSREI). 

According to a statement, the Morrisown, New Jersey-based private equity real estate firm has recapitalised 10 Universal City Plaza (UCP), the tallest building in the San Fernando Valley via a joint venture entity formed for the purpose. The recapitalisation includes the refinancing of $294.5 million of existing debt with a combination of new third party debt and equity from Normandy and MSREI. 

The completion of the recapitalisation follows Normandy’s earlier announcement of the renewal and expansion of a 427,000-square-foot lease with the building’s anchor tenant, NBCUniversal, for a 12-year term. Normandy will retain a majority equity ownership interest in 10 Universal City Plaza and will continue to manage the property on behalf of the partnership with MSREI. The new $200 million senior loan obtained by the partnership was co-originated by Citigroup Global Markets and JPMorgan Chase.

“It has been a pleasure to collaborate with the MSREI team to secure a capital structure for 10 UCP from which we can continue the positive leasing momentum at the property,” said Jeffrey Gronning, managing principal at Normandy Real Estate Partners in the statement. Gronning added that 10 Universal City Plaza is Normandy's only building in Southern California, but the firm is looking to acquire more in the area.

Normandy took control of the 774,240-square-foot, 36-storey tower in 2009 when the previous owner defaulted on debt owed to Normandy. Eastdil Secured represented Normandy in the transaction.

Separately, this transaction follows news in November that Normandy launched its third real estate investment fund. Normandy Real Estate Fund III is targeting $500 million in total capital commitments and minimum commitments of $10 million. The value-added vehicle is looking to invest in US office properties, primarily in New York, Boston and Washington DC. In addition, the fund is selectively targeting assets in Los Angeles and San Francisco.