Tenancy Turnover Lands Brookfield Office Building on Servicer Watchlist


Brookfield Property Partners’ 54-story office tower One Liberty Plaza landed on its loan servicer’s watchlist on Oct. 6 as a result of tenancy turnover in the last year, according to data from Trepp provided to Commercial Observer.

Special servicer LNR Partners—a subsidiary of Starwood Capital Group—pointed to a decrease in debt-service coverage ratio on the property, from 1.11 percent in 2014 to 1.02 percent this year, and expects a further decline.

SEE ALSO: PPM America Lends $62M on Georgia Multifamily Acquisition

In May 2014, the Bank of Nova Scotia, which occupied 10.2 percent of the building’s rentable area, departed. The bank’s website lists 250 Vesey Street as its current location, which is part of property company’s Brookfield Place.

Most recently, Goldman Sachs’ lease at the office property expired in April 2015, though the space has been empty since September 2011, when the firm moved to its new headquarters at 200 West Street. The bank previously occupied 12.2 percent of space at One Liberty Plaza.

To add to future losses, the data storage firm Quantum Corporation, which occupies 5,422 square feet, will not renew its lease upon expiration in April 2016.

The $331 million loan on the 54-story tower serves as the largest loan in a Goldman Sachs-sponsored commercial mortgage backed securities deal from 2007—GCCFC 2007-GG11—and comprises 17.9 percent of the deal’s remaining collateral.

The building has a total of 2.2 million square feet of net rentable space and its owner is currently in negotiations with an industrial company for the entire seventh floor—44,027 square feet—of the building, according to servicer commentary.

Additionally, international law firm Clearly Gottlieb Steen & Hamilton, which currently occupies 537,121 square feet in the building signed on to add an additional 10,533 square feet to its footprint starting in June 2017.

Brookfield currently has 11 office suites listed for rent, with two more that will become available later this year and in 2016.

The tower was completed in 1972 as the headquarters for U.S. Steel and sits on the former site of the Singer Building, which occupies the entire block across from Zuccotti Park.

A spokeswoman for LNR declined to comment. A spokeswoman for Brookfield declined to comment.