Odd Lots Lots More on the Two Troubled NYC Office Buildings Everyone's Talking About
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May 31, 2024 
Hiten Samtani, founder of ten31 Media, offers valuable insights into the recent turmoil in New York's commercial real estate market. The discussion centers around the troubling fates of 1740 and 1440 Broadway, analyzing their impact on AAA-rated bonds and delinquency rates. Samtani explores the complexities of tenant concentration, financial implications, and the innovative ideas for repurposing vacant office spaces. He also delves into the evolving landscape of office real estate, highlighting the challenges and potential solutions for a struggling market.
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Inspiration for a Hit Song
- The song "Money (That's What I Want)" by Tommy James and the Shondells was inspired by a building in New York City.
- The building, 1740 Broadway, had a large sign for Mutual of New York, which the band saw and used as inspiration.
NYC Office Building Distress
- Two NYC office buildings, 1740 Broadway and 1440 Broadway, are facing financial difficulties, highlighting the distress in the commercial real estate market.
- The AAA-rated tranche of a CMBS tied to 1740 Broadway experienced losses, a first since the 2008 financial crisis, raising alarm bells.
Single-Asset CMBS Risk
- The CMBS deal for 1740 Broadway was a single-asset deal, lacking the diversification of typical CMBS conduits. This concentrated risk contributed to the losses for AAA bondholders.
- This raises questions about the appropriateness of AAA ratings for single-asset deals.