Despite owing more than $20M in unpaid interest, SL Green and Wharton Properties have opened up a mortgage escape hatch on a landmarked retail property in Times Square.

An affiliate of SL Green and Wharton acquired the $195M loan tied to 1552 Broadway and the retail portion of 1560 Broadway, according to New York City property records first reported by PincusCo.

United Overseas Bank originated the mortgage in 2017 before transferring it to a venture controlled by SL Green and Jeff Sutton’s firm last month. The venture paid $63M to buy the debt, which had ballooned to $219.5M when including $26.4M of accrued and unpaid interest, SL Green disclosed in its second quarter earnings release on Wednesday.

The floating-rate debt matured in February 2024, according to SL Green's most recent annual report. The nearly 58K SF across the two properties was just 12.6% occupied as of Dec. 31.

Sutton and SL Green acquired 1552 Broadway and the leasehold on the retail at the GFP-owned 1560 Broadway for $137M in 2011. The former building is a historic landmark adorned with miniature sculptures of actresses Ethel Barrymore, Marilyn Miller, Mary Pickford and Rosa Ponselle.

Known as the I. Miller Building, 1552 Broadway was leased to Express, which was reportedly paying $20M annually in rent before it filed for bankruptcy last year and closed the store.

Representatives for SL Green, United Overseas Bank and Sutton didn't respond to Bisnow's requests for comment.

SL Green has made a habit of escaping troubled loans for huge discounts. At 1552 and 1560 Broadway, its partnership paid less than 30% of the outstanding balance to acquire the loan. A venture owned by SL Green and Vornado Realty Trust paid off the $125M mezzanine loan tied to 280 Park Ave. in April 2024 for just $62.5M.

Months earlier, SL Green resolved the $182.5M mortgage tied to 2 Herald Square for just $7M.

The REIT, the largest owner of Manhattan office space, beat analysts’ expectations for revenue and cash flow in the second quarter. It announced it had surpassed its $1B fundraising goal for an opportunistic debt fund focused on New York City office properties.