New York REIT expects liquidation to be complete by end of March 2018

George Comfort & Sons will retain 1.2% interest in One Worldwide Plaza after REIT purchases majority stake
By Rich Bockmann | May 11, 2017 01:20PM

Wendy Silverstein and One Worldwide Plaza (Credit: Getty Images)

Save the date: New York REIT expects the liquidation of its 3.3 million-square-foot portfolio to be completed early next year. But first, it needs to Sort Out One Worldwide Plaza.

“From a timing standpoint, our sales calendar is being driven first by the need to assume the debt and acquire the remaining interest in Worldwide Plaza,” company CEO Wendy Silverstein, who was brought on late last year to oversee the embattled REIT’s liquidation, told investors on her first earnings call with the company Thursday.

Silverstein said the company needs at least $2 billion in real estate assets — not including its 49 percent stake in the 1.8 million-square-foot One Worldwide Plaza — in order to meet the debt-assumption requirements to take over the $875 million, securitized loan on the property.

“As a result, no other assets can be sold until the debt-assumption process is complete,” she said. “We cannot control or predict the timing or the outcome, but our expectation is that the transfer will be approved in the very near future.”

Assuming the REIT can assume the debt in the near future, Silverstein added, the company expects the liquidation to be complete by the end of the first quarter in 2018. She said the company has a deadline in early January 2019 to complete the process.

New York REIT’s contract at One Worldwide gives it the option to purchase the majority interest from its partner, George Comfort and Sons, which will retain a 1.2 percent interest once the transaction is complete.

As for other properties in the portfolio, Silverstein said the 711,800-square-foot office building at 1440 Broadway has received the most interest so far from prospective buyers.

The building is more than a quarter vacant, and Silverstein said the company can achieve better pricing by leaving it that way and marketing it to buyers who are looking for a value-add play.

“People who are the best buyers for this asset … they want to do the leasing themselves,” she said. “Substantial leasing [by New York REIT] might actually hurt the process.”

“That will be one of the first assets that goes on the market,” she said.