An office building controlled by Rudin Management is headed to special servicing, but at the request of the owner itself.
The $425 million mortgage backing 32 Sixth Avenue in Tribeca was transferred to special servicing last month, according to Fitch Ratings. The mortgage for the 28-story, 1.2-million-square-foot property matures in November, according to Crain’s.
The loan transfer was due to “imminent maturity default.” But a representative for Rudin told the outlet that it requested the transfer to enable negotiations to kick off for a loan modification.
“We remain current on our loan payments and are working in good faith with our lenders toward a mutually beneficial agreement,” the developer told Crain’s.
Like many office buildings in New York City, debt fears appear to be attached to waning occupancy at the 1932-built property. Rudin acquired the former AT&T headquarters in 1999 for $150 million and poured $100 million into the building, which was almost fully occupied a decade ago.
But occupancy has dropped sharply since the start of the pandemic and was only 57 percent as of June, according to Fitch. CenturyLink Communications downsized significantly, Dentsu Holdings USA downsized and ultimately relocated closer to Grand Central Terminal and iHeartMedia division AMFM Operating left the property when its lease expired.
In 2021, Rudin partnered with flex-office provider Industrious on a 52,000-square-foot space on the 13th floor, a space that includes nine private suites that can hold up to 50 people each.
In 2015, Rudin borrowed $425 million to refinance the property with a CMBS-backed loan underwritten by JPMorgan Chase and Deutsche Bank.
Rudin is one of the most prominent real estate dynasties in New York, owning roughly 14 million square feet across the office and residential sectors. It’s also one year into a succession that saw the family’s third generation — 70-year-old Bill and his 72-year-old cousin Eric — turn over operations to the fourth generation: Bill’s kids, Samantha and Michael.
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