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By: Marty Raminoff
Columbia Property Trust, the commercial landlord, has defaulted on $1.7 billion worth of mortgage loans backed by a portfolio of seven office buildings situated across New York City, San Francisco, Boston and Jersey City.
As reported by Crain’s NY, the real estate company is currently working with lenders at Goldman Sachs, Citigroup and Deutsche Bank in an effort to restructure its loans. Columbia owns and/or manages some 7.9 million rentable square feet of notable office space primarily in New York, San Francisco, Washington, D.C., and Boston. The company, founded in 2003, is controlled by investment giant Pimco—which boasts over $118 billion in private real estate assets and has some 290 CRE investment professionals in 32 offices across 19 countries. Columbia’s NY properties in the noted portfolio of seven buildings includes: 245 W. 17th St., a 12-story building in Chelsea; 315 Park Ave. S, a 20-story building in Flatiron; and the office condo at 229 W. 43rd St in Midtown Manhattan’s Theater District.
“We, like most office owners, are addressing the unique and unprecedented challenges currently facing our asset class and customer base,” a spokesperson for the company said in a statement. As reported by Bloomberg, Columbia’s 17th Street property, as well as another property in San Francisco, are both occupied by Twitter, which boldly announced in 2022 that it would not be paying the rent for its office spaces in a bid to reduce its operating costs. Columbia had sued the social media giant owned by Elon Musk in December, asking the San Francisco County Superior Court to force the tenant to pay over $136,000 in rent owed in arrear for the West Coast office space. In New York, Twitter occupies close to 140,000 square feet at its Chelsea building. Part of that office space is subleased by ride-share firm Lyft.
The office portion of the building at 229 W. 43rd St., was first purchased by Columbia in 2015 for $516 million. It was formerly the New York Times Building. In August, Buzzfeed announced that it would relocate to the Columbia building, putting its own headquarters at 111 E. 18th St. for sublease. The retail condo at the 229 W 43rd St building is owned by Kushner Cos. Last year, that retail portion had faced default too, when that owner missed mortgage payments for the 250,000-square-foot space.
Columbia’s default comes amid plenty of financial turmoil for office landlords across the board. Earlier this month, GFP Real Estate defaulted on a $103 million loan for the DuMont Building at 515 Madison Avenue in Midtown Manhattan. The Chetrit Group, too, is looking for a new loan on its $85 million mortgage tied to a Hudson Yards site at 545 West 37th Street.
In other evidence of the shaky commercial real estate market, in early February, Columbia sold a Midtown South office building in its portfolio, taking a roughly $11 million loss. As per Crain’s, the company sold the building at 149 Madison Ave. for $77 million, though it had purchased it in 2017 for $87.7 million.
