DRA/Colonial ($742mm) receives extension modification

Barclays put out a loan report today on this loan, which is has pari passu pieces in three CMBS deals. The mod is a positive for investors as it doesn't change the rate, doesn't reduce interest cash flow, and requires deposits, and some effort to sell properties and pay down principal. The extension is for two years, with an additional year possible but dependent on a 50% principal reduction from sales (new max extension = July 2017).

666 Fifth Avenue Modified

They managed to get 666 Fifth Avenue modified down into senior $1.1 billion senior note and the rest into a hope note, a new maturity date in 2019 (from 2017), and the rate dropped to 4.5% from 6.3% - all according to a Bloomberg article today.

In other news, Kushner was seen outside the Uniqlo store shopping for Christmas gifts for his new kid on CafePress.com

Hotel Lenders avoid Foreclosure

Bloomberg has an interesting article on hotel lenders.

. "Servicers do drag their feet with them a lot more because they aren't sure what to do."

(unless there is a backroom deal to be had)

Among hotel loans being worked out is $1.44 billion in financing backed by 355 La Quinta Inns & Suites owned by a unit of New York-based Blackstone Group LP.

...
"Special servicing is a routine precondition to requesting an extension and we have done this in over a dozen other similar situations."

(translation, "we've defaulted on over a dozen other failed loans where we are the borrower)

"Having some type of extension on an existing loan already in place, rather than a foreclosure or REO situation, is more likely in hospitality than in other commercial sectors," Stacey Berger, executive vice president at Midland Loan Services Inc., said in October. REO refers to real estate owned by lenders following a foreclosure.

h/t Anon

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).

CMBS The Biggest Challenge in CRE over the next 12 - 24 months - BNP Paribas

What is he talking about 15 different parties and 15 different layers of debt? Is he talking about a CMBS deal? I don't think he knows what he is talking about - skip ahead to minute 4:50 and can stop at 6:39.

This is the same tired argument of someone never involved in a loan mod or workout - it's difficult, but it should be difficult to default on an agreement and change the terms.

IRS documents rules for REMIC modifications

HT Traffic Court and Real Estate Econometrics. Modifications outside of extensions, have historically been relatively rare, but they are becoming very common in the current environment. I don't have any hard data - just based on recent conversations.

IRS Remic modified rules

Irs 2

UPDATE: This drove 3-5 pt rally yesterday! It was more of a rule-relaxer than a game-changer, but the new guidance was fairly specific that modifications, especially extensions, could be taken as a preventative measure, and far in advance of an anticipated default event.