Manhattan Office Tower Enters Special Servicing

November 5, 2025

Finance New York News Northeast More Office

The building is a designated New York City landmark.

The Manhattan office tower at 261 Fifth Ave. has entered special servicing after the due date for paying off its mortgage came and went without a payment, Crain’s New York reported, citing rating agency KBRA. The building owner, The Feil Organization, has apparently been unsuccessful thus far in finding new financing to replace the expired $180 million loan which dated from the mid-2010s.

Exterior shot of the office building at 261 Fifth Ave. in Manhattan — The office building at 261 Fifth Ave. is a designated New York City landmark. *Image courtesy of Yardi Matrix*

Loan terms include payments of more than $266,000 per month, payable interest-only at a note rate of 4.42 percent, according to Yardi Matrix data. The note is associated with a CMBS pool, with U.S. Bank as the lender and Bank of America as the originator.

The master servicer is Wells Fargo Bank, while the special servicer is Midland Loan Services. The Feil Organization, which has owned the building for 20 years, hasn’t responded to a query from Commercial Property Executive on the matter.

A designated New York City landmark, the 450,000-square-foot structure rising 26 stories was developed in the late 1920s. The tower features floorplates ranging from 11,698 to 19,389 square feet, as well as some 18,000 square feet of first-floor retail and a 57,305-square-foot showroom, Yardi Matrix also shows.

The building was 87 percent leased at the end of 2024, a rate that suggested there was enough cash flow to pay its debt-related expenses, Fitch Ratings reported earlier this year.

The Feil Organization has a national portfolio of about 26 million square feet. In Manhattan, other assets held by the company include office buildings at 551 Fifth Ave., 257 Park Ave. S. and 488 Madison Ave.

Special servicing for office still on the rise

Borrowers whose loans are associated with CMBS pools are having a tougher time staying out of special servicing these days, with the Trepp CMBS Special Servicing Rate rising 36 basis points in September to reach 10.65 percent. That is the highest rate in more than a decade; in May 2013, the overall rate was 10.67 percent.

The special servicing rates for office-associated CMBS loans have been the highest for some time now, as broader office real estate trends continue to pressure property performance nationwide. The rate didn’t budge much month-over-month in September, up a single basis point to 16.91 percent. Still, that is higher than all the other property types, and represents an increase from the 15.58 percent registered only six months ago.

In fact, the two largest loans to enter special servicing in September were both office-associated loans, for a combined total of almost $730 million. One of those was the $425 million 32 Avenue of the Americas loan, which transferred for imminent maturity default, Trepp noted.