An office building owned by Rudin Management, located at 32 Sixth Avenue in Tribeca, has been transferred to special servicing at the request of its owner. The $425 million mortgage for the 28-story, 1.2-million-square-foot property is set to mature in November, according to Fitch Ratings and Crain’s.
The transfer was attributed to an “imminent maturity default.” A Rudin representative explained to Crain’s that the move was made so negotiations could begin for a possible loan modification. “We remain current on our loan payments and are working in good faith with our lenders toward a mutually beneficial agreement,” the developer told Crain’s.
The property, originally built in 1932 as AT&T headquarters and acquired by Rudin in 1999 for $150 million, underwent $100 million in renovations. While it was nearly fully occupied about ten years ago, occupancy has since declined sharply. As of June, only 57 percent of the building was occupied, according to Fitch.
Several major tenants have reduced their presence or left entirely. CenturyLink Communications downsized significantly; Dentsu Holdings USA also downsized before relocating closer to Grand Central Terminal; and AMFM Operating, part of iHeartMedia, exited when its lease expired.
In response to changing market conditions, Rudin partnered with flex-office provider Industrious in 2021 to create a 52,000-square-foot flexible workspace on the building’s 13th floor.
Rudin refinanced the property with a $425 million CMBS-backed loan underwritten by JPMorgan Chase and Deutsche Bank in 2015.
The company is recognized as one of New York’s major real estate families, managing approximately 14 million square feet across office and residential buildings. Leadership recently shifted from Bill and Eric Rudin to Bill’s children Samantha and Michael as part of a planned succession.
