Tuesday, October 14, 2014

MSC 2007-HQ13 top loan to be sold at an estimated 133% loss


Pier at Caesars is under contract to be sold for $3mm.  Well, it had to get resolved at some point.  A colleague who had visited the place once said, "Everyone I saw there looked lost."

Two aspects of this property's story point to how the special servicer was negligent. 

First was when, soon after Hurricane Sandy, they issued a bulletin relaying that damage was minimal and tenants were being allowed back into their premises.  A few months later, Sandy-related damages of over $10mm were reported.  Huh? 

Second, as pointed out by Barclays, the special rejected a $25mm bid when the property was put up for sale on Auction.com about 3 years ago.  So, the special managed to subtract $7mm/year in value, yet will still collect their fees.

By the way, the HQ in HQ13 stands for "High Quality" 

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