Monday, September 26, 2011

Bank of America Center Refied

This $845mm loan refied last week - BACM 2004-4 ($150mm senior, $103mm rake legs), BACM 2004-5 ($137mm), MLMT 2004-BPC1 ($130mm), and $230mm in Mezz.

The new debt ($600mm) was provided by Pac Life and Met Life, carries a 5.1% coupon, 10 year balloon, amortizing structure.

This 1.8mm square foot office is 93% leased at an average rate of $56.35/sf with the major tenants being BofA (659k sf), Kirkland & Ellis (125k sf), and UBS (107k sf).

Vornado purchased a 70% stake of this property and 1290 Avenue of the Americas in 2007.

CMBS in a Top Position when Risk-On Trade Returns

From Chris DeReza @ Bloomberg (sorry no link):
Sept. 26 (Bloomberg) -- As Treasury yields hit new lows, investors should see even greater value in CMBS spreads that still provide one of the highest AAA-rated yields available above 3%, Amherst debt analysts led by Darrell Wheeler write in client note.
  • CMBS AAA legacy spreads have given up most of 2011 rally, moved from S +175bps to +325bps
  • Have underperformed IG corporate spreads that are out only 15bps in second half of 2011
  • This is relative to CMBS AAA widening, which is more in line with riskier high yield spread widening of 196bps: Wheeler
  • Buying earlier last week suggested investors are questioning how much European crisis should affect U.S. economy
  • "When investors start to move money from the sidelines and back into risk assets this dislocation should put CMBS bonds at the top of the shopping list as they provide one of the last remaining relative yields in an uncertain economic environment": Wheeler
  • 30% enhancement of legacy deals withstands default scenarios in any double dip recession projection while “simplicity of the credit math is compelling"

Sunday, September 25, 2011

Harvard to buy $1+ billion triple net leased real estate

They're allocating $360mm in equity. Article here.

We don't need your stinkin' money

The WSJ reports that BofA selling $888 million CRE mortgage portfolio:

A venture of Square Mile Capital Management LLC, Invesco Ltd. and a fund managed by Canyon Capital Realty Advisors LLC is buying the portfolio, a mix of performing and nonperforming loans tied to 32 properties, the person said. The buildings include the eight-story Renaissance Centre office building in Wilmington, Del., and the Bank of America Tower in St. Louis, which is not owned by the bank.


The buyers have been active lately: New York private-equity firm Square Mile recently was part of a team that bought a 4,700-unit distressed apartment portfolio in the Midwest, while Dallas-based Invesco in June bought into 230 Park Ave. in Manhattan, an office building.

Wednesday, September 21, 2011

GSMS 2011-GC5, $1.75bln

As Dow Jones puts it:
Goldman and Citigroup increased the size of the deal to $1.7 billion from $1.5 billion, and adopted a far more conservative structure for it than in July. The deal includes 30% credit enhancement for senior investors--or 50% more than dealers offered and investors accepted in July--meaning more than one-quarter of the issue would have to default before the top holders experience any loss.

Take note: 30% c/e is equal to 25% protection...

74 Loans, $1.74bln

Class Fitch/Mdy/MNSTR Size($mm) WAL(yr) CE% Cum LTV Debt Yield PxGuid $px
A1 AAA(sf)/Aaa(sf)/AAA 90.398 2.30 30.000 41.9% 16.9% S+100a 100
A2 AAA(sf)/Aaa(sf)/AAA 476.574 4.68 30.000 41.9% 16.9% S+175a 101
A3 AAA(sf)/Aaa(sf)/AAA 86.430 7.21 30.000 41.9% 16.9% S+190a 101
A4 AAA(sf)/Aaa(sf)/AAA 568.249 9.55 30.000 41.9% 16.9% S+185a 101

Beacon and Seattle

Deutsche Bank had an article out early this morning (I was actually at my desk when it hit, which is unusual in and of itself, and it scared me when I got an email) on Beacon and Seattle.

It was very detailed and well done, and I'm not going to do it proper justice, but the basic premise was that the senior bond holders are not getting a fair shake - this loan in particular spans 6 different CMBS deals with projected shortfalls breaching the AJs on two of the deals. Noting in the conclusion that the sales prices on the released properties have exceeded $1.1billion, while less than $840mm of the senior debt has been retired.

Tuesday, September 20, 2011

LNR does the splits

CRENews has a full update here.

Three New Unites
  1. Archetype Capital Markets - property level financing
    1. Archetype Mortgage Capital subsidiary to be run by Larry Brown
  2. Archetype Investment Management
    1. Archetype Financial Institutions Services Group to buy small balance commercial mortgages I assume falls under AIM, not ACM, but it's not clear.
  3. LNR Asset Servicing - special servicing operation to be run by Adam Behlman

Monday, September 19, 2011


This is the dumbest thing I've ever heard of. I don't know how much NetFlix costs me each month - if it's less than $50, it's worth it. We use it in the car on the IPad to entertain the kid with movies, we use it at home via the Wii to watch movies and TV shows, and we get a DVD in the mail every week -- that integration and wide coverage is what made their model work.

If they feel like they have to split the services, that's fine - offer a combined service and a split service and handle the permissioning in a way that doesn't impact the customer.

So, now you have me - the ideal customer. Willing to pay top dollar for an integrated service and you're telling me that I now have to have two separate log-ins, two separate bills, and at least one of the companies is going to have a really stupid name that makes me think of Napster... I would guess that we are most likely to not sign up for the DVD service and just fall back on RedBox 100%, and for streaming movies/shows we've actually had a lot of success using Hulu, HBOGo, etc. - we actually pulled up a True Blood episode on our lap top and plugged the monitor output directly into the TV once with great success, although I understand there are more direct ways to do it. We'll probably maintain the NetFlix streaming service for some time longer, but I don't see it surviving long-term.

There is no known exposure to Netflix in the CMBS universe (I checked for the Los Gatos headquarters and the distribution centers that I could find, and none of the addresses showed up), I just had to get that out.

Sunday, September 18, 2011

Lending Partner Sought (BBW) by WSJ Bank (SW/M)

The WSJ reports that more banks are looking for lending partners to shorten the amount of time they have to warehouse loans before securitizations.

If only they had a good index to hedge that risk...

Inland Raising $1.8bln for a diverse REIT?

I dunno, this seems like a bad idea. REIT investors don't like diversity across property types.

CRENews reports a sharp increase in lending rates

I'm not a subscriber and thus can only see the little snippet on the front page. If more of you would click all the high quality ads in the sidebar I could afford luxuries like, but until then we all suffer!

711 Third Avenue for sale

This SL Green owned office property has a $120mm senior mortgage in MLMT 2005-MCP1 and they are expecting $200+mm in the sale.

I heard some update on them on Bloomberg News last week about their ability to maintain their "high" dividend... I must have heard wrong, its pathetic at <1%.

Espirit Closing 100% of US stores

Retail Traffic Court highlighted the news. Stores are being closed domestically, in Spain, Denmark and Sweden.

Loan Modifications

Georgian Apartments (COMM 2007-C9 and CD 2007-CD5) - Sold out of bankruptcy. Final details not clear. I'll post an update.

ProLogis Portfolio (JPMCC 2007-LDP5 - $127mm) returned to the special servicer.

Forum in Carlsbad (WBCMT 2005-C20 - $85mm). This is a office (218k s.f.)/retail (47k s.f.) property in Carlsbad, CA that prepaid (maturity=7/2015) paying off the A5 and a portion of A6A, and resultig in a penalty of $3.4mm. The mezz lender had taken over by the Mezz Lender, LEM Mezz (aka Lubert-Adler).

Five Mile takes another bite at Innkeepers USA

The WSJ reports:

Five Mile submitted a preliminary nonbinding offer for Innkeepers earlier this week to acquire its 64 remaining hotels, the people said. The offer is slightly higher than an opening bid Five Mile and Lehman made for Innkeepers in a May bankruptcy-court auction. Since then, the two sides have been negotiating terms. The deal consists mostly of assumed debt and converting debt to equity, the people said.

Under the broad contours of the proposed deal, Five Mile would assume a substantial portion of Innkeepers's senior mortgage debt and, along with investment partners, make certain cash payments to creditors.

Those investment partners are Starwood Capital Group and Hersha Hospitality Management, which both would end up owning a piece of Innkeepers, people familiar with the matter said. Hersha, a hotel-management company partially owned by Starwood, would manage the properties for the ownership group, one of the people said.

Lehman would convert a chunk of its mortgage debt to ownership stakes in Innkeepers. Some of the remaining mortgage debt would be paid back, people familiar with the matter said.

Overall, the assumed debt, conversion of Lehman debt to equity and other cash contributions bring the value of the deal to more than $1 billion, the people said.


* Innkeepers Keeps Chapter 11 Control 9/14/2011
* Innkeepers, Cerberus Spar 9/1/2011
* Innkeepers Sues Cerberus 8/30/2011
* Innkeepers in Escrow Fight 8/24/2011
* Cerberus Puts Off Closing Innkeepers Deal 8/17/2011

Another AJ takes a shortfall

CSMC 2008-C1 AJ was hit with a shortfall in September. I think this makes for the 4th AJ shortfall?

LBUBS 2006-C7, GECMC 2007-C1, JPMCC 2008-C2, and now CSMC 2008-C1 - am I missing any?

Wednesday, September 14, 2011

Various Loan Updates

Barclays cranked out notes on a number of resolutions, modifications, and appraisals the last few weeks. I went back over the last few weeks and updated any that I missed or didn't post from elsewhere:

WBCMT 2007-C31 - Lembi Portfolio $142.5mm 9/14/11
AREA Properties purchased a portion of the portfolio (20 of the 29 properties) for $59.6mm. BCG estimates a 25% severity related to that purchase, and speculates that the purchase covers the 20 REO properties that accounted for $63mm of the original balance.

LBUBS 2006-C7 AJ takes a shortfall 8/17/11

MSC 2006-IQ12 - $250mm RREEF Industrial Portfolio to be sold. BCG anticipates the loan will be assumed. 8/17/11

BACM 2007-1 and BACM 2007-2 -- $325mm 575 Lexington Avenue. new appraisal is up 30%. See additional comments here. 8/16/11

GCCFC 2007-GG9 - $305mm Schron Portfolio appraised at $121.2mm 8/12/11

WBCMT 2004-C10 and WBCMT 2004-C11 - $500mm Starret-Lehigh refinanced. 8/11/11

Tuesday, September 13, 2011

JPMCC 2011-C5

No talk, yet.

        Rating          Size     WAL    Principal             Certif.   NOI Debt
Class  (MDY/FTC/MSTR)   ($MM)   (Yrs)   Window        C/E     LTV       Yield
 A-1    Aaa/AAA/AAA    $49.765   2.55   10/11-5/16  30.000%   41.7%     16.9%
 A-2    Aaa/AAA/AAA   $199.727   4.83   6/16-10/16  30.000%   41.7%     16.9%
 A-3    Aaa/AAA/AAA   $405.850   9.79   4/21-8/21   30.000%   41.7%     16.9%
A-SB   Aaa/AAA/AAA    $65.448   7.17   5/16-4/21   30.000%   41.7%     16.9%

 A-S    Aaa/AAA/AAA    $86.237   9.89   8/21-9/21   21.625%   46.6%     15.1%
  B      Aa2/AA/AA     $51.485   9.96   9/21-9/21   16.625%   49.6%     14.2%
  C       A2/A/A       $39.901   9.96   9/21-9/21   12.750%   51.9%     13.5%
  D    Baa3/BBB-/BBB-  $65.644   9.96   9/21-9/21    6.375%   55.7%     12.6%

Monday, September 12, 2011

MSC 2011-C3

A-1   AAA(sf)/Aaa(sf)     85.448   30.000   2.6        110-115
A-2   AAA(sf)/Aaa(sf)    448.881   30.000   4.8        205-215
A-3   AAA(sf)/Aaa(sf)    219.010   30.000   7.6        225-235
A-4   AAA(sf)/Aaa(sf)    291.053   30.000   9.7        205-215

A-J   AAA (sf)/Aaa(sf)   162.253   19.125          *** not available***
B      AA(sf)/Aa2(sf)     69.005   14.500  9.86        400a
C       A(sf)/A2(sf)      44.760   11.500  9.86        500a
D  BBB(high)(sf)/Baa1(sf) 31.704    9.375  9.86        575a
E   BBB(low)(sf)/Baa3(sf) 54.085    5.750  9.93        650a

Delinquency rate for CMBS highest in 14 years

Okay, its some attention grabbing headline to an article about delinquencies by someone who hasn't spent as much time studying them as others, but after she makes a frowny face at me for saying that, they'll go back and notice some imprecise grammar and a few contradictory statements in their analysis. But hey, its a blog, you can't expect perfection from a blog. :-0.

Meanwhile, I really needed a headline to go with this pic from

What's it supposed to say? I don't get what it is really supposed to say here?

BOA says its time to buy CMBS

Alan Todd said Go Big or Go Home.

Not really, but he did say to cautiously and slowly add exposure at the top of the stack.

Southridge Mall (124mm - JPMCC 2005-CB11)

Southridge lost Steve and Barry's and Linens N Things to bankruptcy and occupancy was at 58% at the end of last year, and a 1.57x NOI DSCR was reported (still included part of the LNT rent, but still impressive). Per Barclays, they extended the maturity date from 4/2012 to 4/2015, and the borrower has committed to a $36mm renovation and leased the vacant space to Macy's.

All else equal, the extension pushes the life of the bond from April 2012 to January 2015, or further (Meridian Mark I & II is with the special and contributes partly to the paydown).

Met Park East ($79.7mm GSMS 2006-GG6) Modified

Barclays reported this Seattle office loan was extended to 11/2015 (from 11/2010), the borrower paid down $2mm of the note, $2mm into an T&I escrow account, an excess cash sweep will go into a rollover reserve, and the note will remain interest only at the original rate (5.54%).

They also noted the A2 should experience some extension risk... I'm getting a cost to the A2 of about 43 bps.

Tuesday, September 6, 2011

CMBX AJs opening ~2 pts back

         | CMBX.5      | CMBX.4      | CMBX.3      | CMBX.2      | CMBX.1
AAA      | -0-20       | -0-20       | -0-19       | -0-12       | -0-10
AM       | -1-11       | -1-14       | -1-10       | -1-08       | -1-02
AJ       | -1-32       | -2-03       | -2-02       | -1-29       | -1-22
AA       | -1-08       | -1-17       | -1-09       | -1-17       | -1-20
A        | -1-01       | -1-15       | -1-09       | -1-02       | -1-00
BBB      | -0-10       | -0-10       | -0-12       | -0-19       | -0-16
BBB-     | -0-12       | -0-15       | -0-14       | -0-14       | -0-13

*Daily change

Five Mile completes Red Roof Inn acquisition

Barclays noted in their weekly today that it completed on August 25th via a $700mm debt acquisition. They are still forecasting a 50 (reported sales price) - 60% (Barclay's high end estimate) loss severity, to be reflected in September's remits.

Thursday, September 1, 2011

Quiet Day - Just Hanging Out

I know how wrong it was to suck you in with a boring heading and then smack you in the face with a huge sack of chimp testicles, but that's just how life is sometimes.

Tomorrow is going to be completely dead too. It probably is not even worth coming into work, but I will be here and will try to post something to make up for this offensive affront to your delicate sensibilities.