Haymes Investment Co. won a two-year extension on a $260 million loan for 5 Penn Plaza in New York after signing about 100,000 square feet of new leases there in 2025.
The extension gives the owner more time to fill the remaining vacant space at the midtown Manhattan office building.
The commercial mortgage-backed securities loan modification pushed the maturity date from next month to January 2028. The debt has been in special servicing since November 2024 due to imminent default concerns tied to declining occupancy and insufficient reserves.
To get the extension, the special servicer required Haymes to contribute $10 million in fresh equity, according to a CMBS loan document.
The modification came after the 25-story tower landed three new tenants this year, including a 31,837-square-foot lease with cryptocurrency security firm Fireblocks. Other recent signings include nonprofit NY E-Health Collaborative, which took about 15,000 square feet, and tech firm Dynatrace, which leased about 4,000 square feet.
The extension shows lenders remain willing to work with office borrowers that demonstrate leasing momentum.
Haymes still faces challenges, though. Thomas Publishing Co., the building's largest tenant with more than 72,000 square feet, was planning to vacate by year-end after subleasing two of its three floors, according to the servicer document.
Mitchell Konsker, JLL senior broker for the property, confirmed to CoStar that today is Thomas Publishing’s last day at the property. He added that he has 42,000 square feet of lease out for signing on the space.
Thomas Publishing did not respond to a request for comment.
Haymes has invested $16 million in upgrades at 5 Penn Plaza since 2021, including a new fitness center and pre-built speculative suites on multiple floors. Those improvements followed a $14 million renovation in 2016 that modernized elevators and added amenities including a podcast studio and private rooftop terrace.
CoStar data show about 249,000 square feet of the 650,000-square-foot building as available.
Leasing activity within the Penn Plaza market where the building is located has been strong with the vacancy rate falling more than 2 percentage points this year to a current rate of 13.4%, according to CoStar data. Given recent performance, vacancy is projected to decline further in 2026, and rents are forecast to rise.
The building, completed in 1917, stands steps from Penn Station and Madison Square Garden. Retail space totaling 17,488 square feet remains fully leased to CVS, TD Bank, CityMD and Cafe Cinq.
Real estate firm Newmark's valuation and advisory group conducted an appraisal in October, valuing the building at $385 million, according to the loan servicer.