NYC Single-Tenant Retail Shows Signs of Distress

New York City single-tenant retail properties are showing increasing signs of distress. While there has been more focus on troubles and bankruptcies among big-box retailers, including Lord & Taylor, J. Crew, and Brooks Brothers, data from DBRS Morningstar found an unusually high level of delinquencies among single-tenant retailers as well. In total, the report found 14 CMBS loans totaling $467.4 million that were either delinquent or in special servicing.

The collateral for a loan at 170 Broadway, a 16,135-square-foot retail condo project occupied by the Gap, is the most significant delinquency among single-tenant retailers. The $70 million loan was transferred to special servicing in July after the tenant stopped paying rent. The special servicer cancelled the tenant’s coronavirus-relief package because of insufficient information, and the Gap filled a lawsuit to prevent the landlord from terminating the lease. Litigation is ongoing.