GEORGE Comfort & Sons made the biggest deal of the year in June, when it bid $605 million for Worldwide Plaza at 825 Eighth Ave.
But now two of its other office buildings are in “special servicing,” which could mean loan payments are late or in default, or reserves have run out.
Commercial Mortgage Alert said 63 Madison Ave. was transferred to special servicing at the end of July, with a $60 million loan that matures in January 2010. New York City Department of Finance data shows a total of $165 million in loans on the property.
According to CoStar Group, Ziff Davis is the largest tenant, with over 300,000 feet, but more than 550,000 is available in the 797,377-foot building. The building is close to Madison Square Park and the Appellate Division court.
According to Real Estate Alert — which quoted Realpoint data — Comfort is facing a similar squeeze at 119 W. 40th St. Its $160 million loan on the 333,990-foot building was moved to special servicing after cash reserves were depleted.
Comfort, along with Leon Charney and Fortis, paid $182 million for the Bryant Park-area building in 2007 and began a renovation. W&M Properties, now known as Malkin Properties, recently acquired a $23 million mezzanine piece at a discount.
Expiring leases, including one for 63,000 feet from Wells Fargo, are not expected to bring in the same rental income even if they are renewed.
Comfort’s spokesman declined to comment.
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The upscale temporary office provider Wurk is in rent negotiations with SL Green Realty Trust.
Court documents show that as of July 15, Wurk owed more that $1.27 million in rent at 1515 Broadway, with at least another $836,000 due since then.
We revealed last November that Wurk had signed a 10-year lease, agreeing to pay $83 a square foot. According to court documents, the rent was modified in December and came due after mid-April. Wurk never paid.
Wurk’s attorney, Menachem Kastner of Cozen O’Connor, said the company wants to come to “a rational, reasonable decision on a reduction or deferment of the rent.”
Sources said Wurk would not agree to negotiations until a judge “suggested” the parties sit down.
Meanwhile, SLG is marketing Wurk’s newly built-out space on the 11th and 12th floors at 1515 Broadway on both CoStar and MrOfficeSpace.com. They are listed as available for direct lease through Jones Lang LaSalle. The offices total 32,394-feet.
Wurk rents the space out to a variety of temp tenants in slices ranging from 500 feet up. Even with a slew of folks out of work and jumping into start-ups, many are launching from home. Mayor Bloomberg‘s subsidized temp offices in a Trinity Real Estate building in Hudson Square may also be pinching Wurk and its competitors.
An area broker who is not involved in the rent war exclaimed, “You don’t sign a lease of this magnitude without some idea that you are going to have to pay rent.”
Ironically, SLG’s CEO, Marc Holliday, said at the Young Mens’/Womens’ Real Estate Association luncheon last week that the SLG portfolio has a default rate of only 1 percent. He said he doesn’t understand, why all tenants aren’t coming in and asking to renew and extend their leases with lower near-term rents.
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Related just confirmed that its 1.2 million foot twin-towered mixed use project at 42nd St. and Tenth Ave. will kick into gear any second. KSW Mechanical Services has been re-awarded an HVAC contract that had been placed on hold in December 2008, and the fully negotiated labor agreement has only to be signed.
The building should be completed in 2011.
KSW and Five Star Electrical have also been awarded the contract for the behind- schedule 12,000-ton central chiller plant at the World Trade Center that will serve the Memorial, retail and other portions of the “east bathtub.”
A much larger chiller plant that was to also serve all the towers was doused by those worried about suck ing in so much water from the Hudson River.
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Nightmare: Vampires are taking over 623 Broadway for the seventh year of its haunted house.
Nightmare 666 and the Museum of Vampyric Artifacts will start Sept. 25 and run through Nov. 7th.
Paul Wolf and Stephen Powers of Denham Wolf Real Estate Services scared up the tenant while Charles E. Lawrence III of Lawrence Real Estate Enterprises signed — perhaps in blood? — on behalf of the ownership. The space had an asking rent of $45 a foot.
