Ivanhoe Cambridge is facing a tough test at a Financial District office building.
The landlord — the real estate unit of Quebec’s public pension fund manager, Caisse de Dépôt et Placement du Québec — defaulted on its $359 million mortgage at 85 Broad Street, people familiar with the matter told Bloomberg. The loan was transferred to special servicer CWCapital Asset Management as a workout plan is discussed.
The debt, part of a commercial mortgage-backed security, was placed on a watchlist four months ago. The loan isn’t set to mature for another two years.
Ivanhoe Cambridge and CWCapital declined to comment to the outlet.
The landlord is also negotiating with Oppenheimer Holdings over its lease terms. News reports from 2011 state the tenant leased 270,000 square feet at the 1.1 million-square-foot property, occupying roughly a quarter of the property. Additionally, a quarter of the building’s space is coming up for renewal in the next three years, according to a Bloomberg CMBS delinquency report.
One possibility for the office building’s future is a residential conversion. Metro Loft Management and Fortress Investment Group were reported in 2022 to be nearing a deal to pick up a stake in the property with eyes on a conversion, but nothing appears to have ever come from those negotiations.
Ivanhoe agreed to buy the 30-story property in 2017 for $658 million. Natixis provided a $360 million CMBS loan to fund the acquisition.
The office building was constructed in the 1980s to house the headquarters of Goldman Sachs. But the bank moved out in 2009 and vacancies have regularly persisted ever since.
Office exposure has been a simmering concern for observers of Ivanhoe Cambridge, which piled into U.S. investments from across the border throughout the 2010s. In New York, it paid $2.2 billion in 2015 to buy the 1.2 million-square-foot 3 Bryant Park — the second most-expensive office purchase in U.S. history at the time — and acquired the News Corp.-anchored 1211 Sixth Avenue for $1.8 billion.
But roughly $5 billion worth of debt on its American investments is set to mature over a 12-month period beginning this year, a test case for today’s challenging refinancing environment.
— Holden Walter-Warner
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