$525M CMBS Loan Secured by 150 East 42nd Street Lands Extension
The loan defaulted in September 2024 after the building learned its largest tenant, Wells Fargo, will leave within two years
By Brian Pascus March 17, 2025 1:44 pm
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A $525 million commercial mortgage-backed securities (CMBS) loan secured by 150 East 42nd Street — a 42-story, 1.7 million-square-foot office building in Midtown Manhattan — has been returned to its master servicer after receiving a three-year extension.
The $525 million CMBS loan — securitized in the MSC 2014-150E transaction — had a maturity date of September 2024. The loan has now been extended until September 2027, but it will remain cash-managed until it is paid off, according to KBRA.
150 East 42nd Street, known as the Socony–Mobil Building, is owned by real estate investor David Werner and 601W’s Mark Karasick.
The joint venture purchased the 69-year-old office building in 2014 for $900 million, having taken out a $700 million loan from Morgan Stanley, which was split into the $525 million CMBS loan and $175 million of mezzanine debt, according to Biznow.
But the building has been hit by declining vacancy and struggling cash flow. Wells Fargo, the building’s largest tenant, carrying roughly 27 percent of leasable space, has announced its intention to vacate the building before its lease expires in December 2028, in a vacancy that could come as early as December 2026. Moreover, net cash flow was 34 percent of its underwriting projection, according to KBRA.
Total occupancy, including Wells Fargo, was 89 percent in December 2024, according to KBRA.
Werner is familiar with office buildings on 42nd Street. CO reported earlier this year that his firm purchased 300 East 42nd Street, an 18-story building, from Fortress Investment Group for $52 million, well below the $122.5 million previous owners paid for the property in 2019
David Werner and 601W did not respond to requests for comment.
Brian Pascus can be reached at bpascus@commercialobserver.com
