CMBS Loan on 280 Park Avenue Hits Special Servicing, Modification in the Works
By Andrew Coen January 29, 2024 4:42 pm
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The $1.1 billion commercial mortgage-backed securities (CMBS) loan backed by SL Green (SLG) Realty and Vornado Realty Trust (VNO)’s 43-story office building at 280 Park Avenue has transferred to special servicing, with the borrowers working toward obtaining a modification and extension agreement, according to a Monday report from Trepp.
The loan, which is collateralized in the single-asset, single-borrower PRK 2017-280P deal, transferred to its special servicer, Wells Fargo Bank, in December. The special servicer indicated in January remittance data that any extension agreement would be “contingent upon a substantial equity contribution to support the future cash needs of the property,” the Trepp report noted.
SL Green and Vornado co-own the 1.26 million-square-foot office tower north of Grand Central Terminal between 48th and 49th Streets. The loan’s debt service coverage ratio for the first nine months of 2023 was at 1.26 with leasing occupancy around 96 percent, according to Trepp.
The 280 Park Avenue property suffered a blow last September when Ken Griffin’s hedge fund giant Citadel paused previous plans to explore leasing 400,000 square feet there.
Deutsche Bank (DB) led the PRK 2017-280P transaction in August 2017 as a floating-rate, interest-only loan slated to mature in September 2024, Commercial Observer reported at the time. The loan replaced $900 million of existing debt that Deutsche Bank and Bank of China supplied in 2016.
The breakdown of the loan included $430 million from Deutsche Bank along with $215 million apiece by Barclays, Citigroup and Goldman Sachs, according to CRED iQ.
Investment bank PJT Partners extended its lease for 140,000 square feet at the 1961-built 280 Park in December while also converting a sublease of 80,000 square feet into a 130,000-square-foot direct lease. The transaction expanded the firm’s total space in the office building to 22 percent from 11.2 percent, according to Trepp.
SL Green and Vornado Realty Trust did not immediately return requests for comment.
Andrew Coen can be reached at acoen@commercialobserver.com
