KBRA Maintains Watch Downgrade Status for Two Ratings of 280 Park Avenue 2017-280P
19 Aug 2024 | New York
KBRA maintains the Watch Downgrade status for two ratings of 280 Park Avenue 2017-280P, a CMBS SASB transaction. The ratings of classes C and D were placed on Watch Downgrade in May because of the challenges the borrower was likely to face in refinancing the loan at its September 2024 maturity and concerns related to near-term tenant rollover. Since the Watch placement there have been reports of positive leasing at the collateral property which will be considered in the resolution of the Watch Downgrades.
The loan was transferred to special servicing in December 2023 after the borrower requested a modification and extension of the loan’s September 2024 final maturity. In April, the loan was modified and extended to September 2026. It was transferred back to the master servicer in July and remains current in payments as of August.
The transaction collateral is a $1.075 billion ($853 per sf) non-recourse, first-lien mortgage loan secured by the borrower’s fee simple interest in a 1.3 million-sf Class-A office property at 280 Park Avenue between East 48th and East 49th Streets in the Plaza District of Manhattan. The floating-rate, interest-only loan had an initial term of two years, with five one-year extension options available. The initial maturity date was September 9, 2019 but the borrower exercised five options to extend the maturity to September 2024 prior to the recent modification and extension. The loan’s sponsor is owned through affiliates of SL Green Realty Corp. (50.0% ownership) and Vornado Realty Trust (50.0%).
Recent positive leasing developments include a long-term lease renewal (140,000 sf, 11.2% of property sf) and expansion (127,000 sf, 10.1%) by PJT Partners and a new long-term lease signing by Elliot Management Corp for about 149,000 sf, 12.0%.
KBRA will continue to monitor the transaction and loan performance and will seek to resolve or update the Watch Developing status within 90 days.
To access rating and relevant documents, click here.