Walter & Samuels, a stalwart of New York City real estate, is fighting foreclosures and distress across its aging office portfolio.
But 315 West 36th Street is its own beast.
The century-old Garment District office building was reappraised last month for $26.4 million or a pitiful $185 per square foot, according to Morningstar Credit. Compare that to the average $507 per square foot office deals traded for in the fourth quarter of 2024, according to an Avison Young report.
Now worth just 20 percent of its 2018 value, 315 West 36th Street is also well below its $77 million loan, Morningstar data shows.
Walter & Samuels, chaired by David Berley, did not respond to a request for comment.
The grade of the decline is shocking but the possible ramifications for Walter & Samuels are more so.
The building has been in foreclosure proceedings since September 2023 after WeWork, which occupied effectively all of the building, quit paying rent. Ultimately, the coworking firm rejected its 36th Street lease in Chapter 11 bankruptcy, leaving Walter & Samuels with a ghost town on its hands.
The occupancy rate as of September 2024 was a dismal 2 percent, according to Morningstar.
When the special servicer on the deal filed to foreclose, it noted Berley and his son Marc Berley signed a recourse guarantee on the debt, court documents detail.
Recourse guarantees hold guarantors personally liable for a debt. The special servicer in the suit did not specify a number for what it may be owed.
The property has been in receivership for nearly 10 months, and JLL was retained as a leasing broker in October. But there has been no progress on the occupancy front; though, Midland, the special servicer on the deal, characterized the building as “in good condition.”
Walter & Samuel also faces foreclosure at 214 West 29th Street after defaulting on a $74 million loan in September, Crain’s reported. About half of the Chelsea office building was formerly leased to WeWork.
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