Posted on 01/17/2024 5:03:37 PM PST by george76
Blackstone defaulted on the $308 million mortgage on a Manhattan office tower more than a year ago — and the debt is now up for sale at a discount of more than 50%.
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The skyscraper has been losing value since 2014, when the mortgage was originated and 1740 Broadway was appraised at $605 million,
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Blackstone ceased funding operating shortfalls at the building and stopped paying the mortgage as of March 2022,..
Midland, however, has yet to foreclose on the tower, though it’s unclear why.
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As of September 2023, the occupancy at 1740 Broadway was a mere 7.4%,
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The tower is just one of many empty office buildings scattered across New York City, which is in a so-called “urban doom loop” caused by an influx of working from home during the pandemic — a trend that has stuck despite return-to-office mandates.
The doom loop concept is defined by empty office towers, which destroy quality of life and eventually drive residents out.
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In the Big Apple, occupancy has only bounced back to 48.4% since the pandemic.
At the start of 2020, however, office occupancy was a strong 90%
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After shouldering a wave of defaults from landlords, banks are sitting on as much as $160 million in losses on loans to the commercial real estate market,
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The grim findings support an earlier calculation by Morgan Stanley that showed lenders would need to negotiate more than $1.5 trillion of their commercial real estate portfolios by the end of 2025 in order to avert defaults.
(Excerpt) Read more at nypost.com ...
This is same “people” that have been purchasing tons of residential homes, correct?
You talk about the topic of commercial leasing and tower occupancy quite a bit.
The bill is coming due in New York City...
Easy - the bank is kicking the can down the road. To foreclose means to write it down in their books - which could easily put them over the edge in insolvency.
Pretending the loan is still performant allows them to keep playing the game a little longer.
When you owe the bank $1,000, you owe the bank. When you owe the bank $300 million, you own the bank.
The skyscraper has been losing value since 2014, when the mortgage was originated and 1740 Broadway was appraised at $605 million,
...
Blackstone ceased funding operating shortfalls at the building and stopped paying the mortgage as of March 2022,..”
Interesting.
So it turns out this piece of NYC real estate is worth far less than what it was appraised for (and represented as by the borrower) to the bank.
AND the borrower stopped paying.
If Trump had done this, they would scream “fraud”.
And of course as it happens, the bank was repaid in Trump’s case.
Here, the bank has suffered harm. The borrower stopped paying.
But this is also not “fraud”. It’s just the business of borrowing and lending in a real estate market.
And most likely, Trump will be “convicted” of “fraud” and Blackstone will just get to default on their loan.
Interesting isn’t it?
So what's happening? I doubt that everyone is working from home. Productivity declines if you work from home. CEOs like Elon Musk isn't tolerating it. So what's going on.
👍
perfect opportunity for a homeless group to crowdfund a commercial building to live in. they could rent part of it out to businesses and live rent free in the rest of it.
I think that’s BlackRock, not Blackstone.
Blackstone does a lot of commercial real estate, which is not a good business right now.
They could sell their properties to NYC to house “migrants”.
Women don’t want to brave the streets of Midtown Manhattan.
Mutual of New York built the structure in 1950 for its corporate headquarters and hired Shreve, Lamb and Harmon to design it. It left the building after being acquired by AXA.
https://en.wikipedia.org/wiki/1740_Broadway
And Trump was charged with evaluating property improperly.
So how might that apply here.
Looks like MANY times worse - (If Trump was even wrong.)
The building is owned by EQ Office and shares a city block with the Park Central Hotel.
https://en.wikipedia.org/wiki/1740_Broadway
EQ Office (originally Equity Office) is a real estate investment company that owns 80 office properties comprising 40 million square feet. The company is owned by funds managed by The Blackstone Group. The company was formerly known as Equity Office.
https://en.wikipedia.org/wiki/EQ_Office
https://en.wikipedia.org/wiki/EQ_Office
“I think that’s BlackRock, not Blackstone.”
It’s BlackStone gobbling up single family homes and turning America into The Land of the Permanent Renters.
BlackRock operates in the equity business. Stocks etc.
BlackStone is the older company with BlackRock having once been part of ‘Stone.
You can read some background on the two connected companies here:
https://www.cnbc.com/2017/06/22/blackstone-or-blackrock-schwarzman-and-fink-did-it-on-purpose.html
Lazy editors there.
“Occupancy in office buildings in the Big Apple has yet to top 50% depiste return-to-office mandates”
Under a stock photo of the San Francisco skyline from the upper story of a high rise.
Thank you both for the responses.
I didn’t know that. You can’t tell from looking at the Blackstone website.
It must be something they don’t want people to know.
Speak for yourself. Our productivity has skyrocketed. We expanded our team to include individuals who are four states away. The remote teams are better than the locals. It's not even close.
We have meetings back to back that previously would have been on separate days due to travel. We can move documents in four days that previously took two to three weeks.
Not everyone, but MANY people are working from home. And for many businesses in NYC, even the ones who have "returned to the office" are only there 2-3 days per week.
The city has become a disaster zone. I was there just before Christmas for a business meeting, and I hope it's another ten years before I'm back (if ever).
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