S
tephen Haymes is seeking to restructure the loan backing his office tower near Penn Station, but the debt has been transferred to special servicing. The $260 million commercial mortgage-backed security tied to Haymes Investment's 5 Penn Plaza was moved due to a decline in cash flow, with occupancy dropping from 97% to 76% since its origination in 2016. Despite this, Haymes has managed to stay current on interest payments and recently made upgrades to the property.

    The loan is set to mature in January 2026, but Haymes' chief financial officer says they are looking to modify it. The debt-service coverage ratio has fallen below breakeven levels, indicating weakening cash flow. However, Haymes officials claim that occupancy is nearing 85% after signing new leases and making upgrades such as a golf simulator and rooftop terrace.

    The building's value was recently appraised at $540 million, although this predates the recent improvements. In addition to the primary CMBS loan, Haymes also received a $40 million mezzanine loan in 2016. Manhattan's office market has struggled in recent years, with Midtown seeing its fair share of challenges.