A Commercial Mortgage-Backed Securities (CMBS) loan totalling $396 million for the 85 10th Avenue office property in Manhattan's Chelsea district has been transferred to a special servicer. According to a report by Morningstar Credit, the transfer occurred due to an impending maturity default. The 633,000 square foot property is jointly owned by Vornado Realty Trust and Related Companies.
Related acquired the property from Somerset Partners in 2007 for $430 million and subsequently brought in Vornado as an equal partner. The $396 million loan is part of the broader loan bundles DBWF 2016-85T, CD 2017-CD3, and BACM 2017-BNK3. Although the special servicer designated the loan as an “imminent default”, Morningstar suggests the transfer may be a proactive measure taken before the December 2026 maturity date.
The building's largest tenant is Google, which currently occupies 47 per cent of the total area. Google has gradually expanded its presence since signing a 180,000 square foot lease in 2014. Despite this, rental income has decreased, particularly since the COVID-19 pandemic. Morningstar Credit reports that 85 10th Avenue's cash flow in 2025 was 28 per cent below original assumptions.
The biometric screening company CLEAR, which signed a 120,000 square foot lease for its new headquarters in 2021, is currently in a rent-free period. Vornado reported an occupancy rate of 89 per cent for the building in its latest second-quarter earnings report.
The eleven-storey property at 85 10th Avenue was originally opened in 1913 as a Nabisco factory. In the late 1990s, it was converted for use as commercial office space. In 2023, Vornado and Related invested in renovating the lobby. Neither Vornado nor Related responded to requests for comment. The report was issued on 12 August 2026 by Brian Pascus.
