Some South Korean investment groups that made heavy bets on underwriting U.S. office tower debt have rolled snake eyes, according to a Bloomberg report. It might be something for others interested in investing in office debt to consider.

IGIS Asset Management had provided subordinated debt for 1551 Broadway in New York City, with its American Eagle store anchor. However, a source told Bloomberg that the company had "decided to cut its losses" and sell its position "at a hefty discount."

Trepp had reported that the building was one of the largest newly modified loans in May 2024. Originally scheduled to mature in July 2021, it defaulted in November of that year after a 120-day forbearance period. American Eagle had three stories of 25,600 square feet of space but the lease ended early this year. The retail rent was two-thirds of the base rent, with 25 stores of LED signage spread across 12 separate screens and 14,500 square feet made up the rest. Valued at $360 million in 2011, it was revalued in 2022 at $442 million but lowered later that year to $378 million and most recently reappraised at $359 million. The maturity date was reset in May 2024 to December 2025.