Even before Coronavirus, the Times Square Center building at 229 West 43rd Street was under financial duress. But the economic fallout that has ravaged New York City due to the pandemic may have just pushed it over the edge. According to Bloomberg, the Kushner-owned building may be on its way to foreclosure.
229 West 43rd Street (once known as The New York Times Building) has historical significance for the city. Formerly the home of The New York Times, the 18-story structure was built in 1913 and was designated a New York City Landmark in 2001. The first six floors of the building, designated as retail/entertainment space, are currently owned by Kushner Cos., the family holding company of former President Trump's son-in-law, Jared Kushner. Columbia Property Trust owns the offices on the upper floors.
A Gradual Decline
As recent as five years ago, the building was valued at $470 million, thanks in part to 100-percent occupancy with leases extending to 2030, including known tenant brands like Guitar Center, National Geographic, Bowlmor, and Guy Fieri's famed restaurant. But over the past few years, several of the tenants began experiencing financial difficulties. In the wake of the pandemic, the building's occupancy dropped to 50 percent, and a recent appraisal valued it at only $92.5 million. The Kushner interest in the property currently carries a $285 million loan by Deutsche Bank AG, as well as $85 million in mezzanine debt. Kushner Cos. defaulted on the mezzanine loan in April 2019 and was on the verge of defaulting on the $285 million by the end of 2019—even before the pandemic hit.
Even as the vaccine signals a gradual return to normal—and many who left New York City during the pandemic are already beginning to return—it may be several years before the city's commercial sector finds its footing again. In the meantime, as the past year has shown, not even the city's most affluent are immune to the possibility of foreclosure. That being said, foreclosure is not inevitable, either for commercial or residential properties; there may be other options and alternatives to losing your home, business, or investment property. If you are facing the threat of foreclosure, our team can help. Call our offices to explore your options.