One Market Plaza Tops List of Maturing Loans to Watch

San Francisco’s One Market Plaza tops the list of maturing office loans to watch this year, according to Trepp.

One Market Plaza comprises nearly 1.6 million square feet and is home to tenants like Google, Visa, and Morgan Lewis, which collectively account for more than 40% of the building’s footprint. (Meanwhile, tenant Autodesk has put its space up for sublease.) The loan matures in February 2024 and has $975 million outstanding. The property was valued at $1.77 billion in 2016.

“A new loan would provide an important benchmark for the value of San Francisco offices,” Trepp’s Manus Clancy says.

Coming in second is New York’s 375 Park Avenue, which has an outstanding balance of $783 million and matures in May 2023. Clancy says the property has seen “substantial tenant turnover” as of late with occupancy falling from 98% in 2018 to 75% today. DSCR is “only slightly above” 1.0x.

Further down Park Avenue, 277 Park has $750 million remaining on a loan that matures in August 2024. JP Morgan is a key tenant with more than 40% of the space, down from 70% in 2021, and intends to open a new office nearby which Clancy says could impact this building at some point.

300 Park Avenue is #4 on Trepp’s watch list, with $485 million outstanding on a loan maturing in August 2023.

“The property once housed Colgate Palmolive, but that was a long time ago. Occupancy fell from 99% in 2018 to 75% in 2020 before rising to 81%,” Clancy says. “The level at which this loan gets refinanced or valued will provide an interesting benchmark for older Midtown Manhattan offices.”

Chicago’s AON Center rounds out the list at #5, with $533 million outstanding on a loan maturing in July. Clancy predicts the near-term maturity combined with 1.22x DSCR and 76% occupancy “could make refinancing a challenge.”

“The existing loan has a rate of 4.63% and the borrower may have to pay a considerably higher rate to refinance,” he says.