Columbia Property Trust eyes $250M for Downtown office short-sale

Columbia Property Trust is looking to sell a new office building in Greenwich Village in a short sale, testing a market that’s seen troubled properties recently trade at eye-opening discounts.

The company, which is owned by the $2 trillion asset manager PIMCO, put the 12-story property at 799 Broadway on the market eyeing a price tag of $250 million, The Real Deal has learned.

That figure is below the $270 million debt on the property after Columbia refinanced the building two years ago with Blackstone Mortgage Trust. Blackstone is being constructive in the process, according to a source familiar, and is offering a pre-arranged financing package to potential bidders that could help smooth the process along.

The building, which was completed in 2022, is 71 percent occupied, according to marketing materials.

“As one of the newest constructed assets in a submarket with minimal office development in the pipeline, 799 Broadway will be ‘newer for longer,’ providing investors with future rent upside and a strong contractual income stream,” read an offering memo from Eastdil Secured, where a team led by Will Silverman and Gary Phillips is handling the marketing effort.

A spokesperson for Columbia Property Trust, headed by CEO Adam Frazier, declined to comment.

If the company hits its pricing expectation, the deal would work out to $1,400 per square foot for the roughly 178,000-square-foot building. 

That pricing would be at the far other end of the spectrum compared to deals that have traded recently at shockingly low valuations.

Last week, the Midtown office building at 135 West 50th Street sold in an online auction on the site Ten-X for just $8.5 million, or about $10 per square foot. That building is on a ground lease and doesn’t bring in enough revenue to cover its rent payments, which is what drove the value down to near zero.

A few days earlier, Lloyd Goldman and David Werner bought the Financial District office building at 100 Wall Street for $116 million, or about $225 per square foot. The 1960s-era building is 74-percent leased and could be a possible office-to-residential conversion.

Columbia Property Trust’s 799 Broadway, on the other hand, is brand new construction with the high ceilings, amenities and abundant light and air that draw tenants. Those were among the qualities cited by Blackstone when it touted 799 Broadway as the kind of deal the company looks to lend on. 

Columbia entered into a joint venture in 2018 to develop the building with Normandy Real Estate Partners, which Columbia acquired in 2020. PIMCO later took Columbia private the following year in a $3.9 billion merger. 

The deal was financed in part by a $1.7 billion CMBS loan that became one of the pandemic era’s biggest defaults when Columbia fell behind on the debt last year. (The 799 Broadway property was not part of the CMBS package.) Columbia modified the loan earlier this year.

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