The $104.5 million mortgage for a prewar office building near Union Square has been sent to special servicing after the building fell behind on property taxes.
Located at the corner of 14th Street and built in 1903, 90 Fifth Ave. is a 140,000 square-foot building grappling with rising vacancy rates and declining cash flow, a common problem among older Manhattan office buildings. Its former anchor tenant, struggling residential real estate broker Compass, is subleasing space, and half the 11-story building is available immediately, according to landlord RFR Realty. Cash flow fell by 8% last year, to $5.9 million, bond-rating firm KBRA said.
Even so, rising vacancies and declining cash flow don’t appear to entirely explain why a special servicer was called considering 90 Fifth’s mortgage doesn’t come due until 2027. Special servicing is where loans showing signs of trouble get worked out.
“The loan is reported as late but less than 30 days delinquent,” KBRA analysts wrote in a report today. “However, prior commentary by the master servicer indicated that the borrower was delinquent on property taxes.”
The most recent property tax bill for 90 Fifth, dated Nov. 18, 2023, showed new charges of $1.8 million due by Jan. 2, 2024, plus outstanding charges of $2 million. The outstanding charges appeared because 90 Fifth, which typically pays taxes in two installments each January and June, made no payment last June, records with the Department of Finance show. The bill, including more than $100,000 in past-due charges, was paid in full on February 13.
RFR declined to comment.
The firm run by developer Aby Rosen owns the Chrysler Building, Seagram Building, and several other office towers and retail spaces.
RFR acquired 90 Fifth in 2000 and in 2013 said it would renovate the lobby and install new elevators, bathrooms and common areas. It also restored the exterior and refinished the storefront, currently occupied by Republic First Bank, whose lease expires in July.
“90 Fifth Avenue is perfectly suited to our portfolio of architecturally significant office buildings in New York,” Rosen said at the time. “This location at the crossroads of Manhattan’s hottest growth neighborhoods will make the office space appealing to a variety of businesses.”
Aaron Elstein , 2024-03-28 18:32:29
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