Press Release

DBRS Releases Commentary on Update for One Court Square After Amazon Cancels Occupancy Plans

CMBS
February 25, 2019

DBRS, Inc. (DBRS) released a commentary titled “Queen for 90 Days – What’s Next for Long Island City’s One Court Square?”

In February 2019, Amazon, Inc. (Amazon) officially broke it off with Long Island City (LIC), cancelling previously announced plans to construct a 4.0 million-square foot (sf) campus in the city’s Anabale Basin as part of the company’s famed HQ2 expansion. As part of the plans for the campus construction in LIC, Amazon reportedly committed to moving into approximately 1.0 million sf of space at <a href="https://viewpoint.dbrs.com/#!/explore?q=eyJtcSI6eyIyIjpbIk9uZSBDb3VydCBTcXVhcmUiXX19&p=0&v=eyJ0IjoibCIsImQiOlt7ImkiOjI5NzkzNiwidHlwZSI6ImxvYW4ifV19" target="blank">One Court Square</a>, a 1.4 million-sf office property in LIC that backs a $315.0 million loan, $265.0 million of which was split into pari passu pieces across four commercial mortgage-backed security transactions, including the DBRS-rated <a href="https://viewpoint.dbrs.com/#!/explore?q=eyJtcSI6eyIxMCI6WyJXRkNNIDIwMTUtTlhTMyJdfX0%3D&p=0" target="blank">WFCM 2015-NXS3</a> deal.

Although the latest developments with Amazon mean it’s back to the drawing board for One Court Square, DBRS believes that the property remains well positioned to benefit from the recent development boom in LIC that has brought significant investment and population to the area. While the proximity to maturity is not ideal, DBRS believes that the healthy exposure of $225 per sf for the senior debt, the cash sweep that will net approximately $35.0 million in leasing reserves and the $20.0 million equity infusion contributed at closing by the loan sponsors support a high likelihood of successful repayment.

Notes:
All figures are in U.S. dollars unless otherwise noted.

A full copy of this commentary is available by contacting us at info@dbrs.com.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.

DBRS, Inc.
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