One World Plaza owners SL Green and RXR have inked a deal to take the office tower out of special servicing. The two have modified the $940 million commercial mortgage-backed securities (CMBS) loan, according to a report from the Commercial Observer. Also, the two million square foot space carries three mezzanine loans that combine for another $260 million in debt.
The landlords first acquired a 49.9 percent stake in One World Plaza in 2017, when it was valued at $1.7 billion. New York REIT Liquidating owns the remaining 50.1 percent.
The move to work out a deal comes after the CMBS loan hit a monetary default and then got transferred to special servicing in September 2024. CO said that the office asset was negatively impacted by Cravath, Swain & Moore departing in August. The law firm tenant previously occupied 30 percent of the property. But that's not all, a report from Morningstar Credit revealed that cash flow was declining at One World due to higher expenses.
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Also, it's worth noting that Nomura, another tenant at One World that takes up space at 34 percent of the property, could opt out of its lease agreement early by January 2027.
The 49-story building features floor plates that range from 20,000 square feet to 35,000 square feet. The asset is situated between 49th and 50th Streets on eight avenue.
While New York City has seen one of the strongest return-to-office rates in the county, a big chunk of the market recorded a hiccup last month. Manhattan leasing volume plunged by 12.5 percent in February versus the previous month to 3.18 million square feet, a report from Colliers found. The Midtown South submarket saw the biggest dip, with a 60 percent decline. However, the resilient office recovery in Manhattan since the pandemic shouldn't be overlooked. Leasing remains up 38.3 percent year-over-year and 18.6 percent above the 10-year monthly average.
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