Rising interest rates and the troubles at WeWork contributed to a fall in valueIndustry super fund QSuper handed back the keys to a prime New York City midtown office tower after its investment went under water just 2½ years after valuing the asset at $US540 million on its books.
The industry fund is a victim of multiple forces in Manhattan’s commercial real estate scene: the downturn in office occupancy, the US Federal Reserve’s monetary tightening, and being a landlord to the stricken WeWork. A spokeswoman for ART did not comment. Sources, however, said the revised valuation was reflected in ART’s QSuper portfolio at the June 30 balance date.Other super funds have also flagged investment write-downs related to global property exposures, particularly in the office sector which is suffering higher vacancy rates relative to retail.
The $US399 million of debt attached was in the form of a commercial mortgage backed security issue, titled JPMorgan Chase Commercial Mortgage Securities Trust 2021-1440.