Weil wind-down leaves $2.3 billion GM Building loan to refinance

Weil, Gotshal & Manges, the largest tenant at the General Motors Building, is winding down, Commercial Observer reported. The move leaves 19.4% of the tower's gross rent exposed against a $2.3 billion CMBS loan due in June 2027.

Weil has occupied the tower on Fifth Avenue since it opened in 1968 and holds 447,075 square feet through August 2034, its largest lease. As Private Wealth Daily previously reported, the firm is vacating the space. The $2.3 billion mortgage was securitized in 2017 across BXP 2017-GM and 10 conduit deals.

For an allocator in the 10 conduit deals, the exposure is to Weil's lease rather than Fifth Avenue rents. The June 2027 maturity is when the market reprices the building. The lease runs to August 2034, more than seven years past the loan. In the lease-first buildings CRED iQ flags, refinancing must underwrite space coming back to the landlord.

CRED iQ found Top 100 law firms among the five largest tenants in 99 office buildings backing $35.4 billion of CMBS debt across 192 deals. In 34 of those deals, carrying $15.9 billion, a law firm is the single largest tenant. The 69 firms occupy 16.5 million square feet, and 55% of the debt is in New York.

Twenty-four buildings carrying $5.8 billion fall into the lease-first group. Ropes & Gray's 345,413 square feet at 1211 Avenue of the Americas expire in March 2027, 17 months before the building's $1.04 billion loan comes due. At 425 Lexington Avenue, the lender has trapped cash since the loan closed this year because Simpson Thacher & Bartlett, with 642,838 square feet, plans to leave when its lease ends in 2033.

In the opposite pattern, leases run well past the loan maturity, so the risk shifts to tenant credit. Cravath, Swaine & Moore's 519,415 square feet at Two Manhattan West runs to 2044, nearly eight years past the maturity of the building's $1.9 billion loan. Debevoise & Plimpton holds 530,722 square feet at the Spiral through 2042. McDermott Will is One Vanderbilt's largest tenant through 2042, and Paul Weiss leases 765,956 square feet at 1345 Avenue of the Americas through 2047, 20 years after that loan matures.

CRED iQ counts 19 defaults with $3.2 billion of debt in special servicing, 9% of the balance against 15.8% for CMBS office loans overall. When a law firm leaves, the vacancy concentrates in a single large block. Covington & Burling's 197,450 square feet at the New York Times Building sit vacant; a $635 million loan defaulted at its December 2025 maturity, and Datadog holds a right of first offer on the space. In Los Angeles, Skadden's 107,058-square-foot lease at One California Plaza was set to end in November 2024, the month a $287 million loan failed to pay off at maturity. A receiver now runs the tower, which is 55.1% occupied.

Not every Weil lease points the same direction. At the Crescent in Dallas, where the firm is a top tenant, it signed an early renewal at $54 a square foot, triple net, for August 2028 through 2039 — 67% above its in-place rent of $32.21. The property was refinanced in March through CRSNT 2026-MOON.

The GM Building loan matures in June 2027 with Weil's lease still running to August 2034.