A $55 million loan tied to Winter Properties’ office building in Greenwich Village has entered special servicing following months of missed payments.
The 10-story building at 57 East 11th Street, fully occupied by WeWork, had its New York lease among the 40 rejected by the coworking company after its bankruptcy filing in November.
Following Winter's failure to make the January loan payment and subsequent defaults, concerns arose. The Real Deal previously identified WeWork as a major tenant in New York buildings, resulting in 80 percent of the $2.6 billion CMBS debt securing those properties being in distressed situations. Among the affected buildings was 57 East 11th Street, with approximately half a billion dollars in debt influenced by WeWork's lease terminations.
Key impacts:
- At 315 West 36th Street and 81 Prospect Street, WeWork’s actions had already caused issues before its bankruptcy. The situation worsened with rent non-payment and loan defaults.
- The abandonment of space at 81 Prospect Street led to complete vacancy, challenging landlords like RFR and Kushner Companies, who defaulted on the $180 million loan.
- Despite these setbacks, efforts are being made to navigate through the challenges. For instance, Walter & Samuel at 315 West 36th Street is exploring options like temporary leasing to accommodate migrants, while Kushner and RFR are grappling with a significant devaluation of their Dumbo portfolio.
As negotiations continue and strategies are being explored to address the financial strains, the landlords are working towards resilient solutions amid the changing landscape.
