[ad_1]
Signature Bank’s collapse delivered an aftershock yesterday, when a ratings agency alerted Wall Street to a jump in vacancies at the Sixth Avenue building where the bank occupied space.
The failure of Signature caused the vacancy rate at 1177 Sixth Ave. to jump by 10 percentage points last year, to 26%, Fitch Ratings said in a report Thursday. The availability rate on the avenue is 13%, according to Savills. Availability rates capture what’s empty now and what’s soon to be vacant.
The property is a 47-story, 1 million-square-foot tower at West 45th Street. It was developed in 1992 and acquired in 2007 by the California State Teachers Retirement System, Silverstein Properties and UBS. In 2021 CALSTRS and Silverstein bought out UBS’s share at an $860 million valuation. Kramer Levin is 1177 Sixth’s anchor tenant, taking 270,000 square feet across floors 22 to 30, according to DBRS Morningstar.
The buildings at 1177 Sixth and 450 10th Ave. both took direct hits in last year’s banking turmoil. Owned by Mark Karasick’s 601W, 450 10th leased 200,000 square feet to First Republic Bank.
After Signature went bust, its new owner, New York Community Bancorp, kept office space at 1400 Broadway owned by the Malkin family. But at 1177 Sixth about 90,000 square feet of Signature’s space was vacated, Fitch said, adding that the building’s cash flow has declined by 5% since UBS was bought out.
Over the next three years the reddish-pink granite building faces the loss of tenants renting 16% of the space, Fitch said, including law firm Faegre Drinker Riddle & Reath and Tradeweb Markets. Fitch lowered its outlook for 1177’s $450 million mortgage to “negative” while maintaining investment-grade ratings for all its various slices. Fitch said property performance “remains in line” with expectations.
CALSTRS, which owns 97% of 1177 and manages $330 billion in assets, declined to comment.
Silverstein reports two new tenants have taken about half the space left behind by Signature.
Private equity firm Mill Point Capital Partners, which occupies the 44th floor, signed a six-year extension and expanded its footprint to 24,000 square feet. The YMCA Retirement Fund leased a similar amount on the 16th floor after leaving 120 Broadway.
Dara McQuillan, chief marketing and communications officer at Silverstein, said that “1177 is a well-amenitized office building in a dynamic neighborhood, and we believe the property will continue to attract a diverse range of tenants looking for modern, comfortable offices with easy access to transit and many of New York’s best restaurants, sights, and cultural destinations.”
[ad_2]
Aaron Elstein , 2024-05-17 18:43:23
Source link