Posted Nov 16, 2022, 6:04 PM
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New Yorker for life
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Join Date: Jul 2001
Location: Borough of Jersey
Posts: 51,919
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https://commercialobserver.com/2022/...ial-servicing/
CMBS Loan on Vornado’s 350 Park Avenue Heads to Special Servicing
BY CATHY CUNNINGHAM
NOVEMBER 16, 2022
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The $400 million commercial mortgage-backed securities (CMBS) loan on Vornado Realty Trust’s 350 Park Avenue has been transferred to special servicing.
An email alert from Trepp broke the news Tuesday, stating the reason for the transfer was “imminent default.” A Vornado spokesperson, however, told Commercial Observer: “Our loan on 350 Park Avenue is absolutely not in danger of imminent default. We requested that the loan be transferred to special servicing due to a complex consent request.”
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Prior to the pandemic, Vornado proposed plans for a new supertall at the site, which would require demolishing the current building at 350 Park and building a new 1,500-foot tower in its place. The construction wasn’t slated to begin until after the building’s tenants’ leases expire in 2023, with a scheduled completion date sometime in 2027.
The Vornado spokesperson declined to comment on the status of the proposed tower, but in an earnings call earlier this month Vornado CEO Steven Roth said the firm would at least be pausing its redevelopment of Penn Station due to the ongoing market volatility, saying: “I must say that the headwinds in the current environment are not at all conducive to ground-up development.”
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The office property was 80 percent occupied as of June 2022, according to CRED iQ, but as of Aug. 30 this year, 15 tenants’ leases— comprising 41 percent of the net rentable area — were due to expire in the following 12 months, CRED iQ data shows.
Those tenants included M&T Bank, the largest existing tenant at 350 Park. In October, the New York Post reported that the bank would be moving its Manhattan headquarters from the office building to new digs at 277 Park Avenue.
Citadel was previously the building’s largest tenant, leasing 176,672 square feet. But Ken Griffin’s hedge fund has been slowly moving into L&L Holding Company’s 425 Park Avenue, with the billionaire CEO taking the top floor as his office — no surprise there.
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