According to a report from the New York Post’s Steve Cuozzo on Tuesday, two of Rupert Murdoch’s entities are mulling a move from Manhattan’s Sixth Avenue corridor. The story notes that News Corp and 21st Century Fox are looking at their options well in advance of their 2020 lease expirations. For CMBS investors, the loan to watch is 1211 Avenue of the Americas, one of two large Sixth Avenue towers in which Murdoch companies reside. The other is 1185 Sixth Avenue, which was once in a CMBS deal but is not currently.
The 1211 Avenue of the Americas property backs $675 million of CMBS debt spread across two 2006 deals. There was also $275 million in mezzanine debt on the property at the time the loan was securitized. The biggest slice of the loan is a $400 million piece that makes up almost 17% of LBUBS 2006-C6. There is also a $275 million piece that makes up 12% of LBUBS 2006-C7.
At the time the loan was securitized, News America was listed as the top tenant with 49% of the space in the 1.9 million square-foot tower and a lease set to expire in 2020. Since then, servicer data has upped the News America footprint to 57% of the space and the lease expiration date is now listed as September 2027. However, the New York Post piece indicates that the lease ends in 2020. (We will contact the servicer.)
For the last three years, occupancy has been between 84% and 89% and DSCR has been between 1.52x and 1.70x. The property was appraised for almost $1.6 billion in 2006. The note matures in September 2016. Securitization documents indicate the base rent for News America was $46 per square foot.
Compliments of TREPP, LLC – a member of the EACC New York.