BGO Hands Back the Keys to Manhattan Tower

BGO, the former BentallGreenOak, has ceded its ownership of the 26-story, 505,000-square-foot Class A office building at 757 Third Ave. in Manhattan by means of a deed-in-lieu of foreclosure to lender New York Life Real Estate Investors, according to property records.

BGO affiliate MEPT had purchased the building from RFR Realty for $355.5 million in 2015, Yardi Matrix data shows. The loan at that time was $205 million, with a maturity date to May 2030, according to the same source.

Further information about the exact circumstances of the deed-in-lieu was unavailable, though the case reflects broader CRE default trends affecting leveraged urban office portfolios.

Reportedly, however, there has been at least some leasing at the building, including an expansion by reinsurance broker BMS Group to the entire 13,194-square-foot 16th floor in February 2024 and a 6,960-square-foot lease by software company Endava.

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Other tenants at the 1963-vintage, Class A building include insurance firm Berkley Insurance, MPA-The Association of Magazine Media, the Consulate General of Portugal and employment agencies Aerotek and Staffing 360 Solutions.

The ups and downs of distress

This past May, Commercial Property Executive took a close look at the risks and opportunities of distressed office properties, which remain attractive to a variety of investors.

For example, Lukas Krause, CEO of SVN International Corp., noted that the most active areas for such acquisitions are major CBDs in primary markets with robust fundamentals and historical resilience. In the case of 757 Third Ave., all of that certainly applies.

A noteworthy sale of a distressed downtown office building occurred in January, when Onward Investors acquired Ameriprise Financial Center, a 960,000-square-foot office building at 707 Second Ave. S. in Minneapolis, from GHR Foundation.

The sale price of just $6.3 million for the 31-story tower was an almost 97 percent discount from its previous open-market price of $200 million, in 2016. GHR sold the asset after taking control of the building in 2023, after previous owner Morning Calm Management’s executed a deed-in-lieu of foreclosure.

Ameriprise, which had been the name tenant since the building’s completion in 2000, announced in 2022 that it would be vacating. Onward’s plans for the building reportedly include the possibility of partial or complete conversion to non-office uses.