Maefield Back in Familiar Territory at 20 Times Square

Maefield Development is back where it probably didn’t want to be at 20 Times Square.

The commercial mortgage-backed securities loan backed by the property’s 99-year ground lease was transferred to special servicing, the Commercial Observer reported, citing Morningstar Credit. The borrower missed this month’s maturity date; Maefield did not return a request for comment from the publication.

Maefield has been down this road before.

In 2018, Maefield and Fortress Investment Group took control of the project by buying out the development’s other investors with loans provided by French bank Natixis. Those deals valued the development at $1.6 billion.

Natixis kept $650 million of that debt on its balance sheet — with the leasehold serving as collateral — while the rest was securitized in one single-borrower CMBS and four other conduit deals.

But after taking full ownership, Maefield and Fortress ran into trouble. Their partnership set up a dynamic at 20 Times Square where it owned both the leasehold and the fee position, making it the tenant and the landlord, a conflict of interest that resulted in Maefield and Fortress paying rent to itself.

In November 2022, a $900 million loan on the Maefield property was transferred to special servicing. The borrower defaulted after $26.8 million in liens were filed against the property in connection with hotel construction and foreclosure actions, according to special servicer commentary.

The following year, Wilmington Trust — the trustee acting on bondholders’ behalf — filed a foreclosure suit. But Maefield survived, securing an extension on its loan before the end of 2023.

The 454-key Edition by Marriott hotel is responsible for much of the revenue at the property, but it’s been a hard road after the location opened a year before the Covid-19 pandemic, only reopening in June 2021.

Additionally, a joint venture between the National Football League and Cirque du Soleil leased 50,000 square feet for an interactive museum, but it lasted less than a year. The retail space at the property is largely vacant today.

— Holden Walter-Warner