Inside the rent roll at Chetrit’s 26 Broadway
A $330M refi reveals what tenants pay at the 19th-century office tower once home to Standard Oil
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Long an imposing figure above Bowling Green and the Charging Bull Statue in Manhattan’s Financial District, Chetrit Group’s 19th-century office building at 26 Broadway has hit the reset button with an up to $330 million debt package led by Bank of Montreal.
Behind its distinctive curving facade sits 840,000 square feet constructed for John D. Rockefeller’s Standard Oil trust in 1885. While historic, the building, which was expanded in the 1920s, is hardly representative of the “flight to quality” that characterizes the office market’s most promising and newly constructed products.
But government workers need office space, too.
New York City’s School Construction Authority is leasing 288,000 square feet in the building through 2041, and a civil claims court that handles lawsuits against New York State takes up another 43,800 square feet.
The building’s proximity to federal and state courthouses acts as “a demand driver” for law firms, according to ratings agency DBRS Morningstar. These include the boutique firm Schlam, Stone & Dolan, which occupies over 18,000 feet.
The Chetrit family acquired the building and two of the three lots on which it stands for $225 million in 2007, adding the leasehold interest on the remaining parcel for $34.9 million in 2010. Proceeds of the debt package will be used to retire existing loans, including senior debt of $220 million held by Cantor Fitzgerald.
Documents related to the debt package provide an inside look at the building’s finances.
The building is 82.2 percent leased to 44 tenants. Primary, a flex office provider co-founded by early WeWork employee Lisa Skye, is the second-largest tenant after the School Construction Authority. It will pay reduced rent through 2023 following its emergence from bankruptcy.
The New York Film Academy and documentary filmmaker Alex Gibney’s Jigsaw Productions collectively take up over 73,000 square feet. The Lang School, a private K-12 school for gifted students with learning disabilities, also operates from the building.
Rents in the downtown office market, whose 73 million square feet of space is second only to the Grand Central submarket, have declined since 2019 to an average price of $60 per square foot. Average office rent in the New York Metro area stood at $73.20, per a DBRS Morningstar report that analyzes REIS data.
The Chetrits, among the city’s dominant real estate players, operate approximately 14 million square feet of office real estate, mostly in New York City.