An Uneven Race to Recovery

Located at 8 Spruce St. in New York’s Financial District is the New York by Gehry. The 76-story apartment tower sports one of Manhattan’s most interesting designs, with the exterior appearing to be crinkled halfway down the south façade. Built in 2011, the 800-unit building, which also houses an elementary school, was praised in the New York Times by critic Nicolai Ouroussoff as “the finest skyscraper to rise in New York since Eero Saarinen’s CBS Building went up 46 years ago”.

And yet, according to Trepp, first-time servicer watchlists indicate that the tower’s occupancy has fallen by more than 20% since 2019.

The $550-million loan backing the apartment has remained current throughout the pandemic and the owner has not requested COVID relief. Still, the loan is in trouble. In 2019, it posted a debt service coverage of 1.93 when occupancy was 98%. The loan was put on a servicer watchlist after its DSCR fell to 1.84x and occupancy dropped to 74% in the first nine months of 2020.