Manhattan Office Building Sells For 6% Below Debt Value

According to Bloomberg, 799 Broadway—one of Manhattan’s newest office buildings, completed in 2022—just sold for 6% below its current debt of $255M.

Behind The Scenes

Located at the corner of Broadway and 11th Street in Greenwich Village, the 12-story property spans 176.6 KSF, including ground-floor retail.

It is 71% leased, with tenants such as Bain Capital Ventures and Tidal. Despite its modern amenities and strong tenant roster, the building’s sale underscores the broader challenges facing the NYC office market.

Savanna’s COO, Thomas Farrell, noted that the property became overleveraged due to falling valuations in the market rather than flaws in the building itself. “With a reset valuation, you end up resetting the economic incentives,” Farrell said.

Broader Context

The sale of 799 Broadway highlights the distress in New York’s office sector:

• NYC office property values have fallen 35% from late 2021 through September 2024, according to MSCI.
• Higher interest rates have made it harder for landlords to cover costs, leading to distressed transactions.
• A September sale in Hell’s Kitchen by a Related Cos. affiliate went at a 73% discount, while 1740 Broadway sold earlier this year for $186M—a fraction of the $605M Blackstone paid in 2014.

Why It Matters

Savanna’s acquisition reflects a growing trend of opportunistic investors targeting distressed properties with strong fundamentals. 

With its modern design and high-quality amenities, 799 Broadway aligns with the market’s “flight to quality,” where tenants prioritize newer, premium spaces.

For lenders like Blackstone Mortgage Trust, the deal also demonstrates a focus on resolving distressed assets at values above their carrying amounts. “This is a great outcome for our investors,” a BXMT spokesperson said.next phase of global growth.