Vornado Realty Trust’s 350 Park Avenue office tower was put on Wells Fargo’s loan servicer watch list this month after its income from rents fell to less than 110 percent of its debt payments, Bloomberg News reported, citing a report from Morningstar.
“The asset is currently generating insufficient net operating income to cover debt service and Vornado has been funding the shortfalls to date,” Morningstar said. Income “is not currently expected to recover enough through re-leasing to eliminate the shortfall prior to the maturity of the loan.”
Vornado acquired the 538,000-square-foot building for $541 million in 2006; it was one of several buildings purchased for more that $1,000 per square foot during the property bubble.
The company has a $430 million loan on the building, which matures in January. [Bloomberg]