Vacancy Rate at Iconic Manhattan Tower with 899 Apartments Hits 26%: This Shows How Fast & Massive.. [View all]

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Vacancy Rate at Iconic Manhattan Tower with 899 Apartments Hits 26%: This Shows How Fast & Massive the Exodus Has Been
by Wolf Richter • Nov 30, 2020

Then there’s the “single-asset” commercial mortgage-backed security (CMBS) backed only by the mortgage of this tower.
By Wolf Richter for WOLF STREET.


This is now happening in apartment towers in big densely populated cities around the US: Suddenly mind-boggling vacancy rates as a large number of tenants have left in recent months. And this is happening even at the best of them. And holders of the commercial mortgage-backed securities (CMBS) are waking up.

The iconic “New York by Gehry” 76-story tower on 8 Spruce Street in the Financial District of Manhattan, designed by architect Frank Gehry and built in 2011, with 899 apartments, plus an elementary school for 600 kids occupying the first five floors, had an occupancy rate of 98% in 2019. By September 2020, the occupancy rate had plunged to 74% – roughly 234 units of the 899 units were vacant!



The photos of the tower with the wrinkled-appearing stainless-steel exterior are from New York by Gehry’s website, which itself lists only about two dozen apartments for rent, ranging from a studio at $2,160 a month to a three-bedroom on the 71st floor for $11,229 a month. No way that it would list all 234 units. That type of catastrophic info is essentially a secret.

The plunge in the occupancy rate caused the mortgage, which was securitized in 2014 into a single-asset commercial mortgage backed security (CMBS), to be put on the servicer watchlist in November, citing the plunging occupancy rate as one of the reasons, according to a note this morning by Trepp, which tracks CMBS. ............(more)

https://wolfstreet.com/2020/11/30/vacancy-rate-at-iconic-manhattan-tower-with-899-apartments-hits-26-this-example-shows-how-fast-massive-the-exodus-has-been/