731 Lexington Ave

Bloomberg’s extension of its lease at 731 Lexington Avenue through 2040 failed to prevent the building’s $500 million CMBS loan from landing in special servicing. The loan, maturing in June, couldn’t be refinanced in the current capital markets. Despite Alexander’s, partially owned by Vornado Realty Trust, offering to pay down $25 million for a four-year extension, the special servicer rejected it. Increasing floating-rate loan payments have strained cash flow, with coverage dropping from 14 times monthly payments in 2021 to just 2 in 2023. However, Morningstar indicated an extension remains a likely resolution by September 2024.