Rudin’s proactive approach to its impending debt deadline at 32 Sixth Avenue yielded positive results.
The company landed a four-year extension on its $425 million commercial mortgage-backed securities loan at the Tribeca office property, the Commercial Observer reported. The extension was secured two months after the debt hit special servicing.
The loan transfer was due to “imminent maturity default,” as the debt was set to come due in November. But a representative for Rudin noted at the time that it requested the transfer to allow for negotiations to kick off for a loan modification.
Those negotiations resulted in a four-year extension, which includes two one-year renewal options, pushing the debt maturity as far back as November 2029. Rudin will also invest $100 million in capital improvements, renovating the lobby, adding an on-site leasing center and elevating the street-level retail.
“With this agreement, we will move forward in full confidence with our longstanding business plan, kickstarting an exciting new chapter for one of Downtown New York’s most important and iconic buildings,” Rudin president Neil Gupta said in a statement.
An Iron Hound Management team including Chris Herron, Kevin Thompson and Anthony D’Amelio advised the landlord on the debt restructuring.
Rudin bought the former AT&T headquarters in 1999 for $150 million and invested $100 million into the building, which was near full occupancy a decade ago. But occupancy dropped sharply once the pandemic began and was at only 57 percent as of June, according to Fitch Ratings.
CenturyLink Communications downsized significantly in 2021; Dentsu Holdings USA also downsized and ultimately relocated that same; and iHeartMedia division AMFM Operating also moved locations when its lease expired in 2022.
Remaining tenants at the 28-story, 1.2-million-square-foot building include Dorilton and Industrious, which signed a 52,000-square-foot lease for the 13th floor back in 2021.
In 2015, Rudin borrowed $425 million to refinance the property with a CMBS-backed loan underwritten by JPMorgan Chase and Deutsche Bank.
— Holden Walter-Warner
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