New York City has felt a little more like the Arctic this month: a frozen landscape with large chunks of ice taking up residence on the East River. But if ever there was a winter warmer in Lower Manhattan — where the wind circles buildings and freezes bones like especially murderous daggers — it’s a hefty refinancing on an office building that received so much investor interest it was a balmy 10 times oversubscribed. 

The $800 million, five-year, interest-only loan on Brookfield Properties’ 225 Liberty Street was co-originated by Citigroup, J.P. Morgan Chase, Bank of Nova Scotia and Wells Fargo, securitized in the LBTY 2026-225L single-asset, single-borrower commercial mortgage-backed securities (SASB CMBS) transaction and had the tightest office CMBS pricing since early 2022. 

Proceeds from the loan, together with $172.5 million of equity from Brookfield, will refinance $900 million of existing debt on the building and also pay closing costs, according to a CMBS presale report from KBRA. 

The 44-story Class A office tower — home to Invesco, People Inc., Bank of America and Brookfield itself — is part of Brookfield Place, and sits a stone’s throw from One World Trade Center, the New York Stock Exchange, the Federal Reserve and City Hall. It’s 100 percent leased today.  

The deal priced last week, but the momentum behind it started building long before, Zachary Cohn, managing director at Brookfield Properties, told Commercial Observer. 

“From the middle part of 2025 into the end of last year, we had the perspective that the K-shaped recovery we’re seeing in the office sector would be widely recognized by market participants, and that CMBS was the right market for this asset,” Cohn said. “We believe that the broad-based investor support and demand that we received is representative of a collective perspective that there are really two classes of office: the high-quality product, and the low-quality product. 

“This asset sits within our long-term ownership portfolio, where we look to optimize with prudent leverage and with a long-term perspective. The other good news is this is a 100 percent leased office building with eight years of weighted average lease term in a complex that saw 2.1 million square feet of leasing last year.”  

Office is certainly back in vogue, but that doesn’t mean investors haven’t got plenty of questions, even when it comes to trophy buildings. The most common concern is, “Walk me through the long-term leasing and viability of the property,” Cohn said. 

He describes four categories of office today. At the top of the hierarchy are brand-new buildings with long weighted average lease terms (WALT); category two encompasses relatively new office buildings, or recently renovated office buildings in good locations with lots of recent leasing, which demonstrates demand and market rent; category three is long-term WALT assets without much recent leasing activity; and then category four office is highly speculative properties. 

“This is a category two asset, which is a trophy New York City office building in a complex that has been around for 40 years and has demonstrated that it’s highly relevant through all market cycles,” Cohn said. “Brookfield’s capital commitment to the asset is helpful, but one of the biggest questions I got was, ‘Are Midtown prospects looking at Brookfield Place at the present moment?’ The answer is yes, but we’re 95 percent leased across the complex. We have another building in Lower Manhattan that we can show those prospects, but we just don’t have a lot of available space at Brookfield Place — which is a good problem to have.”  

Of a generic “downtown,” Petula Clark once said, “The lights are much brighter there, you can forget all your troubles, forget all your cares…” And tenants seem to agree with the 1960s songstress’ perspective. The building at 225 Liberty Street is one building within the five-building Brookfield Place — a 14-acre mixed-use development featuring 7.5 million square feet of office space and 300,000 square feet of retail. Further, the 2.1 million square feet leasing at the complex represented more than 40 percent of all office leasing completed in Lower Manhattan last year. 

Brookfield Place serves as several buildings’ headquarters today. Case in point, in December, Moody’s announced it would take 460,000 square feet at 200 Liberty Street (and an analytical, researched approach was surely utilized in its search for the best spot). 

In October of last year, Brookfield also closed a $1.3 billion CMBS refinance for 660 Fifth Avenue, and the appetite and availability of the debt markets has only intensified since then. 

“The start of 2026 marked a significant shift for markets,” Cohn said. “The broad-based liquidity from traditional capital sources returned to what we’ve seen in a normalized credit environment. As an owner, markets are always open and liquid at a price, but we’re happy to see credit spreads that are tighter and generally reflective of appropriate levels of competitiveness in the market. Borrowers in the United States today have a lot of options.”

Before moving onto the next deal, however, Cohn is reflecting on 225 Liberty Street’s financing highlights and challenges. 

“The highlight is clearly the investor demand. There’s no question about that,” he said. The challenge was, for us, figuring out the combined credit structure and how it fit within our broader capitalization strategy of the business. When we look to put a capital structure in place, we think about how it fits within the broader Brookfield balance sheet, and make sure that it’s best for our investors.”

Cathy Cunningham can be reached at ccunningham@commercialobserver.com.