There might come a day—though it seems uncertain—when real estate experts realize that the exit of tenants and loan expirations at a certain office building don’t spell doom for the property.
Take, for example, 568 Broadway, a striking 12-story building in Soho that Eric Hadar of Allied Partners and Bobby Cayre of Aurora Capital have owned for approximately 20 years.
Last fall, when Moody’s issued a warning that Vox’s Group Nine Media would “significantly reduce” the cash flow for this building, major news sources were quick to predict future complications. Suddenly, this 330,000 square foot building faces an uncertain future, seemingly leaving behind over 100,000 square feet unoccupied!
Yet, despite these challenges, the retail space at 568 Broadway is up for lease, targeting high-end tenants like Equinox and the flagship Boss Athletic-Good store. Interestingly, a complex $200 million mortgage faced challenges in February but has since been successfully restructured. Reports from Midtown South indicate that 60,000 square feet of leases are already in place, although the specific tenants remain unidentified.
Bret Harvey, a senior managing director at Newmark representing the owners, mentioned that the restructuring of the loan “provided capital to improve the building.”
“The market has changed,” Harvey observed, noting the shift since the pandemic began. “Owners are looking to capitalize on the rising demand.” He pointed out that this property stands as one of Soho’s largest office buildings, with a 30,000 square foot floor plate that can accommodate large users.
Moreover, “a lot of buildings around here lack windows on three sides,” he added, which could make this property even more appealing.
The ongoing capital upgrade, estimated at $50 million, is already in progress, featuring a new lobby, elevator modifications, and a brand-new roof deck conceived by Studio Architecture.
“This is the perfect moment to push rents,” Harvey said, with target pricing ranging from $80 per square foot to around $120.
