American Strategic Investment Company is on the verge of losing another Manhattan office property, this time via foreclosure.
Foreclosure proceedings have been launched at 1140 Sixth Avenue in Midtown West, Crain’s reported. ASIC appears resigned to losing the property, according to a Fitch Ratings report, as it “has indicated a lack of funds to maintain the property” and “expressed willingness to cooperate with the lender in returning the property.”
The 250,000-square-foot property is at the corner of West 44th Street. Its anchor tenant is City National Bank, but filling the space has been difficult for the landlord; the property is 26 percent vacant, ASIC revealed in a filing last month.
ASIC acquired the 22-story property from Blackstone in 2016 for $180 million. It defaulted on its mortgage payments in April, according to a filing, leading special servicer LNR Partners to call in the full $99 million loan that matures next year.
Issues have been long-running at the property. In 2022, the firm — then called NYC REIT — cited “financial difficulties” of tenants and early lease expirations for breaches of covenants at four properties, including 1140 Sixth Avenue, as well as 9 Times Square, 400 East 67th Street/200 Riverside Boulevard and 8713 Fifth Avenue.
The owner did not respond to requests for comments from Crain’s.
ASIC owns 1 million square feet in New York City. The company has just $7 million in cash on hand, according to a company filing from last month.
A seller mindset has taken over the firm, spearheaded by CEO Nicholas Schorsch, Jr. A year ago — almost to the day — ASIC entered into a contract to sell 9 Times Square for $63.5 million; ASIC purchased 9 Times Square in November 2014 for $162.3 million.
It also put 123 William Street on the market, a 550,000-square-foot Financial District office building boasting a 16 percent vacancy rate.
— Holden Walter-Warner