Time Running Out For $750 Million In CMBS Debt Backed By 20 Times Square Project

SectorReal Estate
CountryMiddle east

By Guelda Voien and Maura Webber Sadovi When megaproject 20 Times Square broke ground in 2015, it looked like a sure bet. Times Square in New York City (NYC). getty Fast-forward five years, however, and the hotel and retail development is a mounting source of dismay, as it backs at least $1.9 billion in debt that is either in default or expected to be soon — including $750 million in commercial mortgage-backed securities bonds passed along to investors — according to three sources familiar with the matter. The redevelopment plan was ambitious, but with a handful of New York’s most lauded real estate figures at the helm and Wall Street bankrolling the project, it was not out of place in the center of the city’s famously “revitalized” tourism hub.

Undergirding the troubles at 20 Times Square is the fact that the outstanding debt is in two pieces: a balance sheet loan on the leasehold, which is backed by the improvements on the land, but not the land itself, and $900 million in loans on the so-called leased fee. While the developers, Maefield Development and Fortress Investment Group, defaulted on the balance sheet loan last year, that ...read more...