CMBS Loan Backed by Vornado, Related’s 85 10th Avenue Sent to Special Servicing
The 633,000-square-foot office property’s largest tenant is Google but has seen rents decline 28 percent below underwriting in 2025
By Brian Pascus August 12, 2026 1:35 pm
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A $396 million commercial mortgage-backed securities (CMBS) loan secured by 85 10th Avenue, a 633,000-square-foot office property in Manhattan’s Chelsea neighborhood, has been sent to special servicing due to imminent maturity default, according to an alert from Morningstar Credit.
85 10th Avenue is owned jointly by Vornado Realty Trust and the Related Companies. Related purchased the property in 2007 from Somerset Partners for $430 million and brought Vornado in as a 50/50 partner.
The $396 million loan makes up DBWF 2016-85T and is part of larger conduits CD 2017-CD3 and BACM 2017-BNK3. It is expected to default ahead of its December 2026 maturity date, according to Morningstar.
The building’s largest tenant, Google, currently takes up 47 percent of its space, as the firm has gradually expanded since signing a 180,000-square-foot lease in 2014.
But cash flow from rents has declined lately, particularly since the COVID-19 pandemic.
Morningstar Credit reports that 85 10th Avenue’s cash flow fell 28 percent below underwriting in 2025, and that biometric screening company CLEAR, which signed a 120,000-square-foot lease for a new headquarters in 2021, is currently in a rent abatement period.
Vornado reported that the building’s occupancy stood at 89 percent in its most recent second-quarter earnings supplemental.
The 11-story 85 10th Avenue first opened in 1913 as a Nabisco factory and was redeveloped for commercial office use in the late 1990s. Vornado and Related invested into renovating the lobby in 2023.
Vornado and Related did not respond to requests for comment.
Brian Pascus can be reached at bpascus@commercialobserver.com.
