When Michael Rudin takes over his family firm’s office portfolio in January, 32 Sixth Avenue figures to be a high priority.
Vacancy has been climbing at Rudin Management’s Tribeca property as office tenants downsize or leave altogether, Crain’s reported. As of March, its occupancy rate was down to 62 percent, according to Fitch Ratings.
Time is of the essence. In 2015, Rudin borrowed $425 million to refinance the property with a CMBS-backed loan underwritten by JPMorgan Chase and Deutsche Bank. That loan is due to mature in 2025 and a credit downgrading for the property may be in the offing.
Still, a spokesperson for Rudin said the building is in “solid financial shape.”
“We recently secured approximately 150,000 square feet of lease extensions with prominent telecom and data center companies,” the spokesperson said. “We are in discussions with a number of prospects about taking space in the building and are actively pursuing additional investments to enhance the building’s amenity program and experience at street level.”
In 2021, Rudin partnered with flex-office provider Industrious on a 52,000-square-foot space on the property’s 13th floor. The space includes nine private suites that can host up to 50 people each.
But that partnership was replacing one of the largest tenants at the building, CenturyLink Communications, which downsized significantly. Another major tenant, Dentsu Holdings USA, downsized that year. Last year, iHeartMedia division AMFM Operating left the property when its lease expired.
While half of the 1932-built property is office space, the other half is used for telecommunications infrastructure.
Rudin purchased the 1.2 million-square-foot, 27-story New York Global Connectivity Center from AT&T for $150 million in 1999. Rudin has since invested $100 million in renovations, according to Moody’s. The company has proposed a triangular extension on the ground floor, but has faced opposition from the community board.
The burden of figuring out next steps for the building belongs to Michael Rudin, who will soon be ascending to the role of co-CEO alongside Samantha Rudin Earls as their father Bill gives up his role. Samantha will be in charge of the company’s apartment portfolio.
This article has been updated with a response from a Rudin spokesperson.
— Holden Walter-Warner
Read more
Development
New York
Bill Rudin stepping down as CEO
New York
Rudin borrows $425M to refinance 32 Sixth Avenue
Commercial
New York
Rudin teams up with Industrious for flex-office play