40 Wall Street Transfers to Special Servicing Amid Trump Fraud Trial
By Mark Hallum November 13, 2023 2:09 pm
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The Trump Organization has yet another fire to stamp out as the $160 million loan on 40 Wall Street just transferred to special servicing, according to reports.
The transfer to special servicer, Rialto Capital Advisors, according to a source with knowledge of the proceedings, is a consequence of the ongoing fraud trial that former President Donald Trump is at the center of.
New York State Supreme Court Judge Arthur Engoron ordered that the parties name potential receivers to manage the dissolution of General Business Law (GBL) 130 certificates associated with The Trump Organization in the state, which triggered the building’s loan to transfer to special servicing, according to the source.
The Appellate Division, however, issued a stay on that order on the basis that 40 Wall Street LLC did not have a GBL 130 certificate. The Trump Organization’s entities have not been ordered into receivership, the source clarified.
“The loan is in full compliance,” a spokesperson for the Trump Organization said in a statement. “We have never missed a payment, we have never paid late, and we have never breached a loan covenant.”
Rialto did not immediately respond to a request for comment.
Current occupancy at 40 Wall Street stands at about 77 percent as of June 2023, and the building was appraised at $540 million in 2015 when Ladder Capital Finance provided a $160 million loan on the property. That loan has an outstanding balance of $122.6 million, according to CRED iQ, with an interest rate of 3.67 percent.
Leasing has seen some movement in the building as of late, with personal injury firm Liakas Law doubling its total footprint to 26,545 square feet across the 34th, 48th and 50th floors in February, and accounting firm NCheng growing its offices from 5,759 square feet to 9,812 square feet in recent weeks.
In late September, Engoron ruled in favor of New York Attorney General Letitia James in her yearslong case to prove that the Trump Organization had committed fraud by inflating the value on a number of properties, such as 40 Wall Street and Trump Seven Springs, by as much as $2.2 billion.
James is seeking a penalty of about $250 million in the case.
Mark Hallum can be reached at mhallum@commercialobserver.com.
