The office tower at 731 Lexington Avenue created glowing headlines for its owner, Alexander's REIT, earlier this month when Bloomberg inked a deal to keep its global HQ there until 2040.

Now, Alexander's crown jewel is making headlines of different sort: Morningstar Credit has disclosed that a $500M CMBS loan backed by the building has gone into special servicing—and the special servicer has rejected Alexander's offer to pay down $25M of debt on the loan, which matures next month, in exchange for a four-year extension.

According to the servicer commentary, Bloomberg's long-term commitment for 947K SF at 731 Lexington did not come soon enough to refinance the debt due to "the capital markets environment for an office loan of this size."

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