An office building managed by Rudin Management, located at 32 Sixth Avenue in Tribeca, has been transferred to special servicing. The $425 million mortgage on the 28-story, 1.2-million-square-foot property is set to mature in November. According to Fitch Ratings, the transfer occurred last month due to an “imminent maturity default.”
A representative for Rudin told Crain’s that the company requested the transfer itself in order to begin negotiations for a loan modification. “We remain current on our loan payments and are working in good faith with our lenders toward a mutually beneficial agreement,” the developer told Crain’s.
The building has experienced declining occupancy rates since the start of the pandemic. Rudin acquired the former AT&T headquarters in 1999 for $150 million and invested $100 million into renovations. A decade ago, it was nearly fully occupied, but as of June, occupancy had fallen to 57 percent according to Fitch. Several major tenants have reduced their presence or left altogether; CenturyLink Communications downsized significantly, Dentsu Holdings USA moved closer to Grand Central Terminal after downsizing, and iHeartMedia division AMFM Operating exited when its lease expired.
In response to shifting demand for office space, Rudin partnered with flex-office provider Industrious in 2021 to open a 52,000-square-foot flexible workspace on the building’s 13th floor.
Rudin refinanced the property with a $425 million CMBS-backed loan underwritten by JPMorgan Chase and Deutsche Bank in 2015.
The company remains one of New York’s most established real estate families, controlling about 14 million square feet across both office and residential sectors. Last year marked a leadership transition from Bill and Eric Rudin—members of the family’s third generation—to Bill’s children Samantha and Michael.
