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$396M CMBS loan linked to 85 10th Avenue sent to special servicing
Morningstar Credit expects the loan to default before its December 2026 maturity as cash flow fell 28.0% below underwriting in 2025.
Commercial Observer reports that a $396 million CMBS loan secured by 85 10th Avenue in Manhattan’s Chelsea neighborhood has been sent to special servicing due to an imminent maturity default, according to an alert from Morningstar Credit.
The property is a 633,000-square-foot office building owned jointly by Vornado Realty Trust and the Related Companies. The loan is part of DBWF 2016-85T and sits within larger conduits including CD 2017-CD3 and BACM 2017-BNK3.
Morningstar Credit said the expected default is ahead of the loan’s December 2026 maturity date. The building’s cash flow has deteriorated, with cash flow falling 28.0% below underwriting in 2025, amid rent declines tied to the COVID-19 pandemic.
The report also highlights tenant concentration and lease impacts. Google is the largest tenant, taking up 47% of the space, and cash flow pressure is also attributed to CLEAR being in a rent abatement period, after signing a 120,000-square-foot headquarters lease in 2021. Vornado reported occupancy of 89% in its most recent second-quarter earnings supplemental, and Vornado and Related invested in renovating the lobby in 2023.