Foreclosure May Be In Sight For 111 Wall Street
The situation with 111 Wall Street might be even worse than initially reported.
Two months after highlighting the challenges faced by the vacant 1.2 million square-foot tower at the corner of South Street, owned by Nightingale Properties and Intervest Capital Partners, the property is now facing foreclosure by mezzanine lender Oaktree Capital Management, as revealed by Real Estate Alert.
An auction is scheduled for September 19, managed by JLL, the tower’s leasing agent, who declined to comment.
In June, we reported that the owners had invested nearly half a billion dollars to purchase the property from the 1960s and extensively renovate it with modern infrastructure. However, they encountered one of the worst office-leasing markets in decades.
The redevelopment project appears to be unfinished, with some new curtain-wall glass yet to be installed, and the interior not fully completed. These remaining tasks could add to the overall cost and potentially reduce the tower’s value, considering its location at the less-convenient eastern end of Wall Street.
Meanwhile, all eyes are on 60 Wall Street, a nearly vacant tower a few blocks east, which is almost twice the size of 111 Wall. Paramount Group, the global operator that owns 60 Wall Street, is considered stronger than Nightingale and its partners, and the tower’s location is closer to the Fulton Center subway complex.
Paramount is currently in talks with various potential tenants through leasing agent CBRE, and the success of 60 Wall is being closely observed, with hopes for a brighter future for 111 Wall as well.
In other news, Governor Kathy Hochul’s efforts have paid off in striking a deal to finally build Five World Trade Center. The building will feature 1,200 apartments, with one-third designated for low and moderate-income New Yorkers, and some specifically for 9/11 survivors and first responders. Although Hochul’s track record in real estate matters has been criticized, the resolution for 5 WTC, which includes $65 million in state subsidies, is seen as a positive step. Activists had pushed for the skyscraper to be 100% affordable, but the developers, including Brookfield Properties, Silverstein Properties, Omni New York, and Dabar Development Partners, are moving forward with their plans.
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