Today, we’ll highlight a deal to show you what title insurance costs, as well as what happens behind the scenes to streamline the closing process.
With the first quarter of 2021 behind us, we’re seeing a general feeling that the office world will return to something close to “normal.” Whether this optimism comes from widespread vaccination, the hope of herd immunity, or better procedures for treating COVID-19, we’re reaching a point where people need to return to the office.
Or is this simply wishful thinking because commercial real estate represents such a vital asset for the city’s building owners, businesses, and overall economy?
Manhattan’s office availability was at 15.5% in February, a record high. And according to a recent survey of employers by the Partnership for New York City, half do not expect to return to the office until September.
Nonetheless, Manhattan has seen some big office refinancing recently.
The Deal
The CIM Group refinanced the $330 million mortgage on 1440 Broadway for $400 million:
New York County (Midtown)
Loan Policy: $883,276
Title Fees: $1,000+
Mortgage Tax (Borrower): $11,200,000
Mortgage Tax (Lender): $1,000,000
Title Grade: N/A
Cornerstone Insight
This property was previously financed in 2017, which generally raises the question: Why did the owners need to purchase title insurance again?
Unlike most insurance, title insurance covers what has happened in the past—in this case, the previous four years. A new loan policy is required to “update” from the prior financing event. All banks will require this to ensure that their loan remains senior to any other debt and that no other liens exist at the time of closing. You will also receive a discount on the loan policy for any refinance.
If you have any questions about surveys or title insurance, or if you would like to discuss an upcoming or potential transaction, please contact us.
