Despite record-setting rents throughout the city, the developers behind a high-end Upper West Side rental building with abundant amenities and eye-popping prices are at risk of defaulting on their loan, citing the pandemic as the primary reason behind their financial woes.
The Aire – a 43-story tower at 200 West 67th Street on Amsterdam Avenue – comes with a slew of amenities including rehearsal rooms, indoor and outdoor children’s play areas, a private party and event deck and more.
Per the building’s website, currently available units range from $3,700 (for a studio) to $12,400 (for a 3 bedroom, 2.5 bath).
The original loan was for $250 million, and according to Commercial Observer, developers A&R Kalimian Realty have $195.8 million to go.
The publication also states that while the building “saw occupancy drop to 70 percent from 97 percent in 2020,” it more recently rebounded back to 97%. (There are 310 apartments in the building.)
Back in 2017, the loan was put on the lender’s watchlist due to concerns about its ability to generate enough income to cover the loan payments, Bisnow reports. This happened after a 10-year tax abatement for the building expired, leading to a 20% increase in taxes every two years since 2014.
In April, the developers “indicated the residential rental market in New York has been decimated in relation to COVID-19, thus, they are offering rent reductions and free rent to retain tenants and rent vacancies.” According to CRED iQ Senior Managing Director Marc McDevitt, the pandemic certainly affected the property, but there were already cash flow issues prior to the outbreak.
It’s hard to say what kind of wiggle room you’ll see on a five-figure monthly rent, but now is probably a good time to find out.