Finance  ·  Distress

CMBS Loan Backed by RXR’s Iconic Helmsley Building Sent To Special Servicing

The $670M SASB CMBS loan transferred due to “imminent maturity default”


One of New York City’s most iconic buildings might be in trouble. 

The $670 million single-asset, single borrower CMBS loan secured by 230 Park Avenue — also known as The Helmsley Building — transferred to special servicing on Nov. 2 due to “an imminent maturity default,” according to a report from Kroll Bond Rating Agency (KBRA). 

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“As a result of the transfer, deterioration in the office sector amid weakening demand, and a high interest rate environment, KBRA has identified the loan as a K-LOC [loans that are at heightened risk of default or in default] and maintains its KPO [KBRA performance outlook] of underperform,” the KBRA report stated. 

The loan’s sponsor is an affiliate of RXR. 

“We’re in discussions with lenders about restructuring the loan,” said David Garten, senior advisor at RXR.  

Built in 1929, the 1.3 million square foot, 34-story, Art-Deco trophy tower has long held an estimable place on the city’s skyline, lurking directly above Grand Central Terminal and juxtaposed by the massive 59-story MetLife Building right behind it, creating one of Manhattan’s most iconic images when viewed from Park Avenue.  

But history and beauty appear no match for the cold, hard truth of commercial real estate finance. 

The KBRA report said that the $670 million CMBS floating-rate loan has a two-year term that expires on Dec. 8. The loan was initially structured with three 12-month extension options that could be exercised only so long as “there are no outstanding events of default.” 

KBRA noted the loan became subject to cash management by special servicing in June 2023 “as a result of the low debt yield.” The building’s third largest tenant  — RELX Inc., carrying 8.4 percent of the rentable square feet — did not renew its lease in October, according to KBRA. 

Total debt stack on the building is $795 million, as senior and mezzanine loans of $50 million and $75 million were originated by Morgan Stanley Mortgage Capital Holdings, on top of the $670 million SASB CMBS sponsored by RXR. 

Correction: An earlier version of this story cited Blackstone Property Partners as a sponsor of the loan, due to KBRA data; a source close to the deal said Blackstone is not involved with the loan anymore. It’s not clear when Blackstone Property Partners exited the investment and officials there declined to comment. 

Brian Pascus can be reached at