CMBS Loan on GMA-Anchored Times Square Office Property Enters Special Servicing
The 75-percent occupied 1500 Broadway is set to lose ABC’s Good Morning America and Nasdaq as tenants.
By Andrew Coen August 12, 2024 4:10 pm
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A $335 million commercial mortgage-backed securities (CMBS) loan secured by a struggling Times Square office asset at 1500 Broadway has hit special servicing ahead of its October 2024 maturity date, according to a report from Morningstar.
The seven-story Class B building is owned by Tamares Group and features a digital display of the NASDAQ ticker. Its loan was originated in 2014 by UBS and Citigroup (C) as part of the TMSQ 2014-1500 single-asset, single-borrower deal. Special servicer commentary provided by Morningstar noted that “preliminary underwriting” to obtain takeout financing is underway.
“Ownership remains committed to the asset and is working diligently with its lenders to extend the loan in order to ensure that the property has the necessary time and capital to backfill the upcoming tenant departures and return the rent roll to the high level of occupancy that has been consistent throughout the Tamares ownership period,” a Tamares spokesperson said, adding that Iron Hound Management Company is currently assisting the firm with the loan extension negotiations.
As referenced by the spokesperson, the property will soon lose ABC’s Good Morning America, which has filmed at 1500 Broadway since 1999, when it leaves for a new Walt Disney Company campus slated to open in Hudson Square next year. Times Square Studios, where GMA is filmed, comprises 13 percent of the gross leasable area (GLA) at 1500 Broadway, according to Morningstar.
Nasdaq, which takes up roughly 10 percent of the property’s GLA, is also planning to leave when its lease expires at the end of August, according to a July Morningstar report in which the rating agency downgraded 1500 Broadway’s CMBS loan. The looming exit of Nasdaq, which has been subleasing most of its space, will add around 53,000 of extra vacant office space and push the occupancy rate down to 60 percent.
The departure of both Disney and Nasdaq has been expected for some time, however, with Disney finishing construction of its New York headquarters and Nasdaq planning consolidation of its operations into 150 West 42nd Street, where it currently occupies space.
Net cash flow at 1500 Broadway was last reported at 25 percent lower than the original underwriting 10 years ago with leasing occupancy at 75 percent as of March 2025, according to Morningstar. It was 91 percent occupied at the time of the CMBS loan’s origination and has already lost a number of key tenants including About.com, which leased 9 percent of the property.
“It always had a fairly granular tenant base, so it’s been a slow bleed of tenants — About.com at 9 percent of the space is about the largest to vacate over the past few years,” said David Putro, senior vice president and head of commercial real estate analytics at Morningstar. “You have a 75 percent occupied New York City building that would likely have a hard time refinancing regardless with another 25 percent due to vacate, which is not a good mix at the moment.”
Putro noted that it is possible another television show could replace the GMA studio, but absent that it would be a challenge to convert it to office usage, with more capital required. He also stressed that converting Nasdaq’s subleases to direct leases could present obstacles.
In addition to the CMBS loan, there is also $170 million of mezzanine debt attached to the property that adds another layer to the workout discussions, according to Putro.
Andrew Coen can be reached at acoen@commercialobserver.com.
