Aby Rosen Secures Short-Term Extension on Troubled 285 Madison Avenue Loan

A spokesperson for RFR did not immediately respond to a request for comment.

Rosen, along with RFR co-founder Michael Fuchs, has poured $65 million into renovating 285 Madison after buying it in 2012. Since then, RFR has signed deals with new office tenants such as fashion brand Tommy Hilfiger, which began leasing nearly half the building in 2019, Commercial Observer previously reported.

Despite 285 Madison welcoming new tenants and hitting a 95 percent occupancy rate, RFR’s CMBS loan tied to the 26-story building was transferred to special servicing in 2022. Rosen’s request to extend the loan’s maturity date was approved at the time, but the loan returned to special servicing in April.

Rosen’s efforts to refinance the loan are likely complicated by higher interest rates attached to the fresh debt. In 2017, Rosen borrowed at 3.8 percent interest — but now the going rate for CMBS office loans is between 6 and 7 percent.

And the property, which sits between East 40th and East 41st streets just south of Grand Central Terminal, was revalued at $411 million in October 2022, after once being assessed at $610 million, The Real Deal reported.

On top of his $222 million debt on the property, Rosen has also taken out a $35 million B note and a $205 million mezzanine loan, according to Morningstar. That brings Rosen’s total risk to $462 million, with Morningstar’s report showing him just barely above break even.

RFR’s initial improvements to the building upon acquiring it in 2012 included a comprehensive lobby renovation, new mechanical systems, upgrades to common areas and new bathrooms on each floor, according to its website.

If Rosen is unable to refinance his loan on 285 Madison Avenue before its maturity, his one saving grace could be if the special servicer modifies the debt, TRD reported.

Isabelle Durso can be reached at idurso@commercialobserver.com.