Some day, and that day may never come, real-estate media will discover that tenant departures and loan expirations at any particular office building don’t portend doom for the building.
Take 568 Broadway, the 12-story, century-old Soho beauty that Eric Hadar of Allied Partners and Bobby Cayre of Aurora Capital have owned for about 20 years.
When Moody’s warned last fall that the exit of Vox’s Group Nine Media caused the building’s cash flow to “significantly decline,” several major outlets foresaw only trouble ahead. OMG — the move-out left the 330,000 square-foot building with 100,000 square feet to re-fill!
But 568 Broadway’s retail spaces are rented to high-end tenants such as Equinox and the flagship BOSS athletic-good store. A troubled, $200 million mortgage loan was successfully restructured in February. Now, Midtown South sources say a lease is already out for 60,000 square feet with an unidentified office tenant.
Newmark senior managing director Brett Harvey, who represents the owners, told us the loan restructuring “provided capital to improve the building.
“The market’s changed” since the pandemic, Harvey said. “The owners are pivoting to exploit rising demand.” The property is one of Soho’s largest office properties with 30,000 square-foot floor plates which can accommodate large users,” he said.
“Not many buildings in this area have windows on three sides,” he said.
An estimated $50 million capital upgrade, already in progress, includes new lobbies, elevator modifications and an all-new roof deck, all designed by Studios Architects.
“It’s the ideal time to push rents,” Harvey said. Target prices range from the mid-$80s per square foot to around $120 psf.
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