Rudin’s 32 Sixth Avenue Value Slashed

Rudin’s troubled Tribeca office building just took a brutal markdown.

The value of 32 Sixth Avenue, the former AT&T headquarters, was cut to $340 million, according to Morningstar Credit. That’s a 56 percent decline from the property’s 2015 valuation of $770 million.

Rudin declined to comment.

The reappraisal comes a month after the company landed a four-year extension on its $425 million commercial mortgage-backed securities loan at the property. The debt hit special servicing in September due to “imminent maturity default” after a representative for Rudin requested the transfer to allow for negotiations to kick off for a loan modification.

Those negotiations resulted in a four-year extension, which includes two one-year renewal options, pushing the debt maturity as far back as November 2029. Rudin will also invest $100 million in capital improvements, renovating the lobby, adding an on-site leasing center and elevating the street-level retail.

Rudin bought the former AT&T headquarters in 1999 for $150 million and invested $100 million into the building, which was near full occupancy a decade ago. Rudin borrowed $425 million to refinance the property in 2015 with a CMBS-backed loan underwritten by JPMorgan Chase and Deutsche Bank.

But occupancy dropped sharply during the pandemic and was at only 57 percent as of June, according to Fitch Ratings. CenturyLink Communications downsized significantly in 2021; Dentsu Holdings USA also downsized and ultimately relocated; and iHeartMedia division AMFM Operating also moved locations when its lease expired in 2022.

The largest tenant at the 28-story, 1.2-million-square-foot building is tech company Telx, whose 146,000-square-foot lease expires in 2033, per Morningstar. Remaining tenants also include Cedar Cares and MCI Communications Services. Dorilton and Industrious signed a 52,000-square-foot lease for the 13th floor back in 2021.