Vanbarton Group has secured a $352 million refinancing for 425 Lexington Avenue, the 31 story office tower across from Grand Central, giving the owner fresh runway at a nearly fully leased Midtown property. The package is structured to replace maturing debt and create reserves while long term tenants remain in place. For Midtown readers, the deal is a sign that lenders are still willing to back transit adjacent, high quality office buildings as leasing momentum returns.
Goldman Sachs provided the $352 million loan in a single property CMBS that sources say was pre placed with BlackRock. The financing is floating rate and interest only with a two year initial term and three one year extension options. The new debt replaces a roughly $290 million mortgage from New York Life and Northwestern Mutual, and a JLL debt advisory team led by Chris Peck represented Vanbarton, according to The Real Deal.
Midtown leasing momentum helps lenders
Leasing in Manhattan has accelerated this year. Tenants signed about 22.8 million square feet in the first half of 2026, a pace industry reporting shows is the strongest since 2002. Colliers data also show average asking rents pushing into the high $70s per square foot and availability tightening across the borough, a backdrop that helped justify the refinancing, New York Business Journal reported.
How Vanbarton plans to use the money
According to reporting on the transaction, proceeds will retire existing debt, fund roughly $30 million in reserves, cover closing costs and return about $21 million to ownership, moves that give Vanbarton liquidity while it continues leasing and capital improvements, The Real Deal reported. The loan’s structure gives the owner near term flexibility but also a timeline to reprice or extend if markets shift.
Why 425 Lexington still draws capital
425 Lexington sits directly opposite Grand Central, a location that historically attracts credit tenants and steady commuter traffic. Vanbarton bought the tower in 2018 and has invested in elevator modernization, window replacement and new tenant amenities to keep the building competitive, according to the owner, and Vanbarton notes those upgrades. Simpson Thacher & Bartlett lists its New York headquarters at 425 Lexington, anchoring the tower’s tenant base, according to Simpson Thacher.
What to watch next
The loan’s relatively short initial term and floating rate mean Vanbarton will have to weigh extension or repricing choices as the two year window approaches. For owners of well leased Midtown assets, the deal is a reminder that strong tenancy and transit access continue to unlock capital even as lenders price for interest rate risk.
