$235M CMBS Loan Backed by Park Avenue South Assets Hits Special Servicing
The two-building, 675,000 square-feet office property faces the threat of 'imminent default,' according to Trepp
By Brian Pascus April 22, 2024 1:32 pm
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The hits keep coming for the New York City office market.
A $235 million CMBS loan secured by 225 and 233 Park Avenue South, a two-building, 675,000 square-feet office property in the heart of Manhattan, has been transferred to special servicing due to the threat of “imminent default,” according to a Trepp report released on Monday.
The $235 million CMBS debt is split up into several loans: a $70 million piece, two $60 million pieces, and a $45 million piece that are part of four separate CMBS conduit packages. Beyond the CMBS debt that is scheduled to mature in June 2027, the property is also encumbered by $195 million in mezzanine debt, according to Trepp.
The imminent default comes less than a month after Meta/" title="meta" class="company-link">meta officially terminated its lease at 225 Park Avenue South (one that was scheduled to last until 2027), in turn opening 225,000 square-feet of office space. The building’s second-largest tenant, BuzzFeed News, shut down last year, while the building’s third largest tenant, STV Inc., announced it would not renew its 133,000 square-feet next month.
All told, 225 & 233 Park Avenue South have more than 253,000 square feet of space available to lease across 10 floors, according to Newmark (NMRK).
Sitting directly off Park Avenue and near both Madison Square Park and Union Square, the 19-story 225 Park Avenue South & the 12-story 233 Park Avenue South are interconnected and stand near several busy corridors of central Manhattan. First built in 1909 and renovated in 2017, 225 & 233 Park Avenue was previously known as the American Woolen Building. The building previously served as the headquarters for the Port Authority of New York and New Jersey from 2001 to 2015, and served as the headquarters for Crown Publishing.
The property had previously been valued at $750 million in 2017, according to Trepp.
Brian Pascus can be reached at bpascus@commercialobserver.com
