Appraiser cuts Meatpacking District store’s valuation to the bone
Property’s tenant hasn’t paid rent since last March
A Meatpacking District landlord got burned by its tenant — and now, the valuation of its storefront has been chopped.
The clothing store AllSaints has not paid rent at its 11,862-square-foot space at 415 West 13th Street since March 2020, according to Trepp, which tracks mortgage data. But as a result, the property’s valuation fell by over 70 percent to $13 million from nearly $50 million in 2016.
RREEF Real Estate, an affiliate of Deutsche Bank, purchased the retail space in an off-market transaction in 2012. It sits on the first floor of a five-story office condo building.
A spokesperson for RREEF did not immediately return a request for comment.
The lender for an $18 million CMBS loan tied to the property is also pursuing avenues to collect what it’s owed. The loan, originated by JPMorgan Chase, is being marketed for sale.
AllSaints opened the Meatpacking location in 2010, and also has a Soho storefront at 512 Broadway. In late June, a U.S. bankruptcy court approved its restructuring, giving the company protection from creditors. It has also filed for insolvency in the United Kingdom.
As part of its restructuring, the retailer was able to modify terms of its leases with its landlords to use “turnover rent.” Instead, its lease payments will come from 20 percent of the store’s sales, according to Trepp. At its Meatpacking site, the modification will lead to an 80 percent rent reduction from its lease, which runs until 2026.
New York city’s retail market has taken a big hit since the pandemic began, with stores closed and foot traffic at record lows. Total retail leasing dropped by nearly 59 percent in the first quarter of 2021 from a year prior, according to a recent report by CBRE.