Crain's reported yesterday that Brookfield (who happened to raise their hand last week when we asked who had a few billion dollars of cash looking for a home in distressed real estate deals) is teaming up with tenants to make another push to buy the property. You'll recall that the tenants actually were prepared to pay north of $4 billion when MetLife original sold the property in '07, and the NY Times, at least, believes that bid will be at least the $3 billion owed on the senior mortgage.
Even if you correctly assume that the NY Times doesn't know what it is talking about and is pulling numbers out of the air that make good headlines, this is still good for the AJ and better bonds. In fact, the faster the resolution comes the better - we should see interest shortfalls get cured and the deals can stop accruing fees, not too mention the legal settlement, potential effects of an assumption or early payoff, etc. The big negative is what the loss to investors is going to be, but it's not going to be as bad as what is priced in to the bonds right now (guessing the C30 AJs are in the 50s, maybe L60s at best).
Feeling a little fat after this week, but got ample helpings of movies like The Patriot, Gone With The Wind (fell asleep), Gladiator, Pearl Harbor, and American Beauty to stir up the spirits. I also read a Robert Ludlum book. I'm itching for a fight ;)
The Black Friday phenomena just disgusts me - even when they're not spraying pepper spray into crowds or bashing the faces of accused shoplifters against the cold linoleum floors of a Super Walmart, the shopping orgy of the year just leaves a disgusting film on the whole holiday. Christmas, in general, is really one of my least favorite times of the year. I've bought the requisite gifts so no one can call me Scrooge, but I'll be damned if I hang a single light or put up a dead tree inside my house (aside from the lumber that holds up the walls). All I want for Christmas are physical gold and silver.
They go on to clarify that losses on all CMBS issued/rated prior to mid-2007 have been just 2.6% and will increase to 10.6% by maturity. I wasn't able to tie in the numbers from the headline to anything in the article, but double digit loss projections at least have the right number of digits...
Two years after we noted that PCV/ST lost their appeal and the win was affirmed by the NY Court of Appeals on the J-51 rent control violation, the tenants have finally won their judgment of $215mm - almost a year's worth of revenues at the troubled property.
Deutsche Bank produced a summary of potential interest shortfalls making it apparent that they need to add a professional "formatter" to their team, but interesting nonetheless. In their worst-case scenario where all of the judgment is paid out of the CMBS trusts, shortfalls shake out as such:
Highest Class hit with a shortfall:
CWCI 2007-C2 G
MLCFC 2007-5 B
MLCFC 2007-6 D
WBCMT 2007-C30 F
WBCMT 2007-C31 G