Three-year downturn in Manhattan retail real estate may have claimed its biggest victim yet.
Manhattan’s three-year downturn in retail real estate may have claimed its biggest victim yet.
A group of international lenders filed on Monday to foreclose on the company controlling 20 Times Square, a 42-story hotel and retail tower once valued at $2.4 billion.
The group, led by a unit of France’s Natixis SA bank, said that 90% of the property’s retail space has been sitting vacant, according to the filing. The lenders also said in the filing that Maefield Development, the firm behind the project, has failed to put up enough money to complete it.
Representatives at Maefield and Natixis declined to comment, and it couldn’t be determined what will happen next. Foreclosures can take time. In some high-profile cases, borrowers and lenders were able to work out their differences, while in others the lender ended up taking over the property.
The troubles at 20 Times Square are the latest sign that the rise of online shopping and a continuing correction after retail rents rose too fast is imperiling a growing number of landlords at some of the city’s most expensive locations.
Times Square, after avoiding some of the worst of the retail pain for years, has been particularly hard hit of late. The district had the highest retail availability rate of the city’s major shopping areas in the third quarter: 31% of all retail space was vacant or available for lease. That’s up from 22% a year earlier, according to brokerage Cushman & Wakefield…
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Main image: Once valued at $2.4 billion, the 42-story hotel and retail tower at 20 Times Square sits largely vacant and international lenders have filed to foreclose. PHOTO- ALEXANDER COHN–THE WALL STREET JOURNAL