Finance  ·  CMBS

Loan on A&R Kalimian’s Upper West Side Tower Hits Special Servicing

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A $195.8 million commercial mortgage-backed securities (CMBS) loan on A&R Kalimian Realty’s The Aire luxury apartment tower on Manhattan’s Upper West Side has transferred to special servicing despite a large occupancy recovery following a big dip during the height of the COVID-19 pandemic.

The 310-unit multifamily property’s loan transfer was first reported Tuesday in an email alert from Trepp. The outstanding debt, which is split between the JPMCC 2013-C16 and JPMCC 2013-C17 conduit deals, is facing “imminent” default ahead of its November 2023 maturity date, according to a June special servicer commentary on the loan supplied by CRED iQ.  Both deals are part of the CMBX 7, an index of 25 CMBS securitizations issued in a 12-month period around 2013. 

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The Aire saw occupancy drop to 70 percent from 97 percent in 2020 before rebounding recently back to 97 percent, according to Trepp. The property’s debt service coverage ratio net cash flow has remained under 1.0x since 2017 after bottoming out at 0.36x in 2017, according to Trepp. It was 0.84x in 2022. 

“The property was certainly impacted by the pandemic, but cash flow issues were evident pre-pandemic,” said Marc McDevitt, senior managing director at CRED iQ. “The borrower is likely anticipating refinance issues and getting an early jump on negotiations for relief, extension, or some other modification of debt.” 

The Aire loan originated by JPMorgan Chase (JPM) was structured with a 1.05x cash trigger and is currently in a cash trap due to low debt service coverage ratio, according to CRED iQ. The original debt package was secured by the fee interest in the 43-story apartment tower located at 200 West 67th Street and consisted of a $225 million senior mortgage and $25 million subordinate loan. 

The property was valued at $365 million at the time of the CMBS issuance in 2013, according to CRED iQ. 

Officials at A&R Kalimian Realty did not immediately return a request for comment. JPMorgan Chase declined to comment. 

Andrew Coen can be reached at acoen@commercialobserver.com