SL Green’s $740 million loan on Times Square building for Caesars' casino-bid lands in special servicing

Real estate giant SL Green’s $743 million loan tied to its 1515 Broadway tower near Times Square in NYC landed in special servicing late last month for imminent maturity default, according to a report from Morningstar.  The site is the one SL Green has picked for its casino bid, where it proposes to turn the office tower, which also houses the Miskoff Theater, into a Caesar’s Palace casino.

The developer, in partnership with Caesars Entertainment and Jay-Z Roc Nation, submitted the $4 billion complex in a bid for one of three state licenses. New York officials are expected to announce winners by the end of 2025.

The loan comes due next March and a refinance would likely saddle SL Green with a higher interest rate. The sponsor is currently paying less than 4 percent interest, according to Morningstar.  An SL Green spokesperson told Real Deal that the loan is performing and the firm is “finalizing an extension on the maturity date.”

“1515 is a premier asset located directly in the center of the Times Square bowtie with substantial cash flow to meet all obligations,” the spokesperson said, noting the building is fully leased.

Morningstar also called the performance ‘stellar.’ SL Green is current on its mortgage payments and revenue at 1515 Broadway is comfortably covering debt service, according to loan data cited by the report. The only downside could be the building’s biggest tenant.

Paramount leases almost all of 1515 Broadway, and announced layoffs in August that would cut 15 percent of its workforce, including several hundred employees at SL Green’s tower. Paramount’s lease runs through 2031. However, for SL Green, the near-single tenancy could complicate a search for new, long-term debt.