Investors in the AAA tranche of the $308 million debt backed by 1740 Broadway in midtown Manhattan only got 74% of their investment back after the loan sold at a steep discount. Creditors in the five lower groups were wiped out.

It is "a really bad sign as to how deep the hole goes," Bloomberg wrote. When everyone gets wiped out, including those holding the most highly-rated slice of debt, it's like a wall full of red flags, languidly stirred by an economic sirocco. Reportedly this was the first such event in the post-pandemic era, according to Barclays Plc.

Bonds backed by single mortgages and tied to older office buildings dominated by one anchor tenant — like 1740 Broadway — are especially vulnerable, they say, adding that some analysts are already predicting further losses as more loans get sold for a fraction of their former value.