The loan backing the Cunard Building in the Financial District is off to special servicing after the borrower defaulted on the debt.
The $250 million CMBS loan at 25 Broadway was not repaid when it matured this month, the Commercial Observer reported. The default was disclosed in a report from Trepp on Monday.
The borrower provided evidence that it couldn’t refinance the debt when an earlier extension on the loan was denied. The Cunard Building is owned by an LLC whose signatory is Aaron Wolfson of the Wolfson Group, according to PropertyShark.
Wolfson’s father, the late philanthropist, hedge fund pioneer and real estate magnate Zev Wolfson, bought the property in 1979 for $15 million, the same amount spent to construct the building, which opened in 1921.
The loan has two parts, one $130 million and one $120 million. Each makes up substantial portions of separate CMBS conduit packages.
The 22-story, 956,000-square-foot building dates back a century and was landmarked in 1995. The property has a limestone facade, center arches and several setbacks. It was built for the Cunard Steamship Line’s headquarters and later became known as the Standard & Poor’s Building for its main tenant at the time.
Occupancy has been 92 percent for the past two years, according to Trepp, even after WeWork vacated approximately 86,000 square feet in February 2021, ending an eight-year run at the property. Tenants today include Moment Factory and Industrious, a WeWork rival that leased 44,000 square feet in June 2022.
Wolfson executives could not be reached for comment by The Real Deal.
Special servicing has become routine for debt backed by older office buildings in New York City as owners deal with high interest rates and reduced occupancy. Last month, a $151 million loan tied to the Chetrit Group’s 65 Broadway — a three-minute walk from Wolfson’s property — was sent to special servicing ahead of an April maturity date, despite Chetrit being current on the debt.
Also last month, the $104.5 million mortgage backing RFR Realty’s office building at 90 Fifth Avenue in Union Square was sent to special servicing. Aby Rosen is contending with rising vacancies and declining cash flow at the 140,000-square-foot property.
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