At a glance
- The space houses 584 professionals and is the largest of the offices the firm will vacate in 10 U.S. cities, Connect CRE reported.
- For lenders and allocators holding Midtown trophy office debt, the block tests whether the space can be re-leased above the $121 a square foot Weil now pays.
- At $121 a square foot, the space carries about $54 million of annual rent.
Weil Gotshal & Manges will leave 447,000 square feet at 767 Fifth Avenue, roughly a quarter of the General Motors Building, as the law firm winds down operations.
The space houses 584 professionals and is the largest of the offices the firm will vacate in 10 U.S. cities, Connect CRE reported. Weil has been headquartered in the 50-story tower since 1968 and is its largest tenant.
For lenders and allocators holding Midtown trophy office debt, the block tests whether the space can be re-leased above the $121 a square foot Weil now pays.
At $121 a square foot, the space carries about $54 million of annual rent. That rate is below what trophy Midtown space commands. BXP's president, Doug Linde, made the point on an analyst call last week: “There is a vast gap between where the in-place rent is at the GM Building and where we believe and perceive the market is,” he said.
Kroll Bond Rating Agency said sound market fundamentals and BXP's sponsorship should let the landlord re-lease part or all of the space, because Weil's rent is not above market.
Midtown office debt stress is already visible: Deutsche Bank has sought a fourth extension on the $242 million CMBS loan against 521 Fifth, as Private Wealth Daily previously reported.
Weil's exit empties a quarter of the GM Building
Weil Gotshal's space at 767 Fifth Avenue and what it carries
There is a vast gap between where the in-place rent is at the GM Building and where we believe and perceive the market is.Doug Linde, president of BXP
Reported by the Sectors desk from Connect CRE and Private Real Estate Daily archive (521 Fifth foreclosure). Published . Corrections