40 Rector Street loan goes to special servicer

June 04, 2010 04:00PM

40 Rector Street (source: Property Shark)

The $80 million loan for a 600,000-square-foot downtown Manhattan office building at 40 Rector Street was transferred to a special servicer yesterday, according to Fitch Ratings, Crain’s reported. The owner of the property, Philips International, defaulted on the loan, which matured June 1. As a result, it was transferred to J.E. Robert Company, a Va.-based special servicer that works out troubled loans. The Rector Street loan is secured by a 440,000-square-foot office property that Philips owns elsewhere in the Financial District, according to a recent Fitch Ratings U.S. CMBS focus performance
report. The report noted that many leases were up for renewal. Nine separate New York City agencies lease nearly half of the actual rentable space in the building, which is located between Washington and West streets. All of those leases are scheduled to expire next month. The lease of the third largest tenant in the 19-story building, Merrill Lynch, also expires next month. Manhattan-based Philips International owns and operates more than 3 million square feet of retail properties, 1.3 million feet of office space and two hotels throughout the East Coast. The company is also the co-developer of a new rental building, the Corner, at 200 West 72nd Street at the southwest corner of Broadway. [Crain’s]