Blackstone, $BX, has sold 1740 Broadway in New York for $185 million, a $420 million loss

Yellowstone Real Estate recently acquired the remaining debt on 1740 Broadway, previously known as the Mutual of New York tower, for $185 million. This is a significant decrease from the $605 million Blackstone paid for the building in 2014. At that time, Blackstone paid nearly $1,000 per square foot for the 621,000 square-foot tower, which was built in 1950 and features a Deco-style design.

The property's $308 million loan was placed in special servicing in 2022, indicating financial difficulties. This fire-sale price is indicative of the current crisis in the commercial property investment market, where office values have plummeted by as much as 50%.

Stephen B. Siegel, head of global brokerage at CBRE, noted that Blackstone's 2014 purchase price was a reflection of the market's optimism, with property values at record highs. Despite Blackstone's efforts to modernize the building with a new lobby, tenant amenities, and a popular restaurant, the pandemic hindered their leasing efforts. As a result, Blackstone relinquished ownership of the property in 2022.

One industry expert commented that Blackstone's initial purchase price was excessive for an older building in the West 50s that required significant renovation. The terms of the loan left Blackstone with little flexibility to lower their asking price.