by Stephen Garner

Lord and Taylor CharityHudson’s Bay Company has closed a new $400 million, five-year mortgage on the Lord & Taylor flagship property in New York City, located at 424-438 Fifth Avenue to refinance the existing mortgage of $250 million due September 2017. The additional proceeds will be used to reduce the borrowings on the company’s revolving credit facility.

In connection with this transaction, the lenders independently commissioned a leading international appraiser to provide an appraisal of the property. This appraisal valued the property at $655 million based on the assumption that the property is net leased by Lord & Taylor at an estimated current fair market rent.

“The opportunistic refinancing of the mortgage on the L&T flagship property is yet another example of the successful execution of our strategy as we continue to leverage our significant real estate portfolio,” said Richard Baker, governor and executive chairman of Hudson’s Bay. “We are pleased to extend our company’s debt maturity profile as well as secure an attractive interest rate of 4.3 percent through the term of the new mortgage. HBC’s two wholly owned flagship properties on 5th Avenue in New York City, which have been valued at a combined $4.36 billion based on independent appraisals, continue to provide the company access to secure long term debt at attractive rates. This debt is non-recourse to the operating company and provides HBC with an efficient capital structure from which to continue its global retailing growth initiatives.”