CMBS Loan on SoHo’s The Prince Building Enters Special Servicing
By Isabelle Durso August 21, 2024 2:12 pm
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A $200 million commercial mortgage-backed securities (CMBS) loan secured by The Prince Building at 568 Broadway has hit special servicing before its October 2024 maturity date, according to a report from data provider Trepp.
The loan tied to the 12-story mixed-use building between Prince and West Houston streets — co-owned by Allied Partners, Midtown Equities, Aurora Capital Associates and the Adjmi family’s A&H Acquisitions — was originally slated to mature in October 2022, but was pushed back by two 12-month extensions, according to Trepp.
Amid a slipping occupancy rate in the property, the 354,604-square-foot building’s loan was transferred to special servicing “due to imminent monetary default,” Trepp wrote in its report. The Prince Building is “unlikely” to refinance its total mortgage in October after suffering “a substantial drop in cash flow over the years,” Trepp also reported.
Spokespeople for the building’s owners did not immediately respond to requests for comment.
During the first half of 2024, the building was only 50 percent occupied — down from 93 percent in 2022, according to Trepp. Its debt-service coverage ratio was also at 1.05x in the first half of the year, a drop from 2.19x in 2022.
The $200 million CMBS debt is split up into two loans: a $125 million piece and a $75 million piece, both part of CMBX 6, according to Trepp.
Allied obtained the mortgage on 568 Broadway in 2012, with big plans to renovate the building and create a rooftop garden for corporate parties and events.
“We are trying to reinforce the building’s reputation as the number one office building in the SoHo market,” Allied CEO Eric Hadar told Commercial Observer at the time.
The building ran into obstacles in 2019 when its value dropped nearly 40 percent, or almost $132 million, CO reported. That’s also when Artists & Fleas announced it was leaving its 19,000 square feet of retail space and 5,000 square feet of storage space at the property.
In better news for its owners, medical platform ZocDoc extended its 50,000-square-foot lease at the building for another 10 years in June 2023 and it filled a 25,000-square-foot retail space left vacant by Forever 21 with Japanese retailer GU in February.
Isabelle Durso can be reached at idurso@commercialobserver.com.
