This is now happening in apartment towers in big densely populated cities around the US: Suddenly mind-boggling vacancy rates as a large number of tenants have left in recent months. And this is happening even at the best of them. And holders of the commercial mortgage-backed securities (CMBS) are waking up.
The iconic “New York by Gehry” 76-story tower on 8 Spruce Street in the Financial District of Manhattan, designed by architect Frank Gehry and built in 2011, with 899 apartments, plus an elementary school for 600 kids occupying the first five floors, had an occupancy rate of 98% in 2019. By September 2020, the occupancy rate had plunged to 74% – roughly 234 units of the 899 units were vacant!
The 32-year $550-million loan matures in 2046 and is interest-only until the “anticipated repayment date” in 2024. It is the only mortgage in the CMBS, which was issued by the New York City Housing Development Corporation (NYCHDC 2014-8SPR) – meaning that this CMBS offers no diversification for investors; they’re exposed to the fate of one mortgage, collateralized by one iconic apartment tower with plunging occupancy.Vacancy Rate at Iconic Manhattan Tower with 899 Apartments Hits 26%: This Shows How Fast & Massive the Exodus Has Been | Wolf Street
There is lots and lots of ‘extend and pretend’ going on as the predatory capitalistic system implodes and collapse on all sides.