- Flagstar Financial, rebranded from New York Community Bank, is selling $343M of distressed loans tied to NYC office and retail.
- The package includes 8 sub-performing loans, including an $80M leasehold loan for Stellar Management’s 220 Fifth Avenue.
- Newmark is leading the sale, citing “challenging capital stacks” across the portfolio.
Flagstar Financial (FLG), which rebranded from New York Community Bank in October 2024 after narrowly avoiding collapse earlier in the year, is offloading $343M in troubled NYC loans.
Dirty Details
According to Commercial Observer, the loans are tied to office and retail assets struggling to perform in the current commercial real estate environment.
Key assets include:
- 220 Fifth Avenue: Stellar Management’s office building is backed by an $80M loan issued in 2022.
- 130 Fifth Avenue: The Olnick Organization’s office property has a $77M refinancing loan from 2022 for the Olnick Organization’s office property.
- 37-18 Northern Boulevard: RXR’s Standard Motors Building in Long Island City is supported by a $66M loan from 2013.
Two additional office assets and two retail condos in Manhattan are also part of the package.
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Broader Context
New York City’s CRE market is under pressure, with office vacancies surging and retail facing a sluggish recovery. Lenders like Flagstar seek to offload distressed debt to stabilize their portfolios.
This particular sale, led by Newmark (NMRK) brokers Adam Spies and Josh King, highlights the financial challenges tied to NYC’s commercial sector and the city’s still-uncertain outlook for recovery.
What’s Next?
The sale of Flagstar’s debt package reflects a broader shift in the commercial property market’s response to current economic conditions.
As more distressed loans surface in NYC and beyond, lenders will continue rebalancing their portfolios to minimize exposure to underperforming assets.
