A lender is bracing for trouble at a pricy Fifth Avenue retail condo.
The $160 million loan connected to the retail space at 685 Fifth Avenue transferred to special servicing this month, according to information provided by Morningstar Credit. The loan was sponsored by GGP, a retail-focused subsidiary of Brookfield Properties, which secured the refinancing for the condo at 685 Fifth from Bank of America and Wells Fargo in 2018.
The servicer said the move stems from its concerns about imminent monetary and maturity default as tenants let their leases expire and move elsewhere, according to information provided to Morningstar.
But GGP in a statement rebuked the transfer, saying it “misrepresents the current status of the loan and the strength of this high-quality asset,” which is occupied by fashion house Coach, high-end footwear brand Stuart Weitzman and camera company DJI Hasselblad.
“The transfer of the CMBS loan from the master servicer to the special servicer is not permitted under the loan documents, and we are evaluating our rights,” said GGP in a statement to The Real Deal. “This action is unwarranted, as the loan remains fully performing and has two years remaining until maturity.”
At underwriting, the 23,500-square-foot retail space off East 54th Street was valued at $470 million, according to Morningstar.
The property’s financials have actually improved since the loan was underwritten. Net operating income has increased, and at $19.7 million annually, it is three times higher than yearly debt service.
Upper Fifth Avenue has maintained the highest retail rents of any corridor in Manhattan, according to research from the Real Estate Board of New York. Median asking rents at the close of 2025 on the avenue were $2,500 per square foot.
Still, the servicer has said it fears monetary and maturity default. Coach’s lease is slated to end in April 2027, and the brand said it won’t be renewing at the location, instead moving downtown to 645 Fifth Avenue, off East 51st Street, the Commercial Observer reported.
Stuart Weitzman’s lease also expires in April 2027, while DJI Hasselblad’s lease expires sooner, in February 2026. The loan is set to mature in July 2028.
Trimont is the master servicer and CW Capital Asset Management is the special servicer.
The building housing the property is the former Gucci global headquarters. The upper floors of the 29-story building, which are unrelated to the loan, were bought from GGP by developer Michael Shvo and partners in 2018 for $135 million. Joining Shvo in the deal were the Wings group, BLG Capital, Latner Partners and Deutsche Finance America, the New York Post reported at the time.
Shvo has turned his floors into 69 condominiums under the banner of Mandarin Oriental Residences.
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