Uniqlo @ 666 Fifth Avenue

Retail Traffic Mag posted some pictures of the new digs for Uniqlo at their two Manhattan locations, including at 666 Fifth Avenue, here.

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

Stuyvesant Town/Peter Cooper Village Tenants win a judgment...

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

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.

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

666 Fifth Avenue Workout

The WSJ reports and every dealer on the street reports that Kushner has worked out a deal on 666 Fifth Avenue. They're going to take a 9.5% haircut back as a B note, Vornado is going to be a partner (improving the ownership) and the coupon is going to be reduced.

Boo, for IOs and deep credit, but huge positive for seniors and mezz portions of the CMBS deals: GECMC 2007-C1, WBCMT 2007-C31, and WBCMT 2007-C33. All of which I own some of and two of which I've had heavy reverse inquiry on the last few days.

*So far, I haven't seen any precise information on what the new coupon is or whether the special has formally confirmed the deal.

I wanna piece of dat...

Vornado purportedly is seeking a portion of 666 Fifth Avenue and is looking to spend 9 figures.

For more on 666 Fifth, read our old posts.

Market Square sold for $615mm

I know, I know, I'm a little behind, but late is better than never.

The trophy DC office property located on the 700 and 800 blocks of Pennsylvania Avenue was part of the Beacon Seattle Portfolio in WBCMT 2007-C31, WBCMT 2007-C32, BSCMS 2007-PW16, BACM 2007-2, MSC 2007-IQ14, and MSC 2007-HQ12. The $905 psf price implies an approximate cap rate of 4.22%.

Note that the $2.644b loan (20 properties) was extended from a May 2012 maturity to a 2017 maturity, and this should result in a partial and substantial release from the loan.

I'd definitely keep an eye out on any current- or next-pay bonds on these deals. For example, it represents 15.66% of the collateral behind the WBCMT 2007-C31 A2 that is currently offered at 255 $104-11 - all else equal, if you assume the full sales price is released, you lose nearly 100 bps of yield and your bond shortens by over 1 year. And, as Barclays pointed out earlier this week, or maybe last week, the reserve requirements are likely to go down as well resulting in further releases.

666 Fifth Avenue gone to special

666 Fifth Avenue transferred to special seeking modification:

"Since the 666 Fifth Avenue loan does not mature until 2017, the special servicer must believe it is in the best interest of the trust to work with the borrower on a loan modification rather than taking control of the property in a depressed market and declining fundamentals," Mancuso said.

This loan does not cover it's debt service by a long shot, despite being 86% occupied (although a portion of that space is dark and likely at lower leases then today's market - in the $60s for class A in midtown). They're current monthly shortfall amount, is about $2mm, not small, but they do have a $70mm reserve balance - 70/2 equals 35 months until it dies at the current pace. The reserve balance is thanks in part to selling half the equity in 2008 to Carlyle Group, and it's not listed in the reserve report from the servicer (which has got to make you a little uneasy).

The big issue is the Orrick space which accounted for something like 232k sq ft at $45 psf will roll at the end of this month and they are leaving ($10.4mm per year in revenue, roughly). They have no firm prospects, but have 3 proposals out currently asking $70/psf (~$16.2mm revenue). Again, midtown class A is more like $60 psf (~$13.9mm revenue).

Can the servicer even allow a modification if there really is 3 years worth of debt service still in there? Are there any automatic ASERs associated with this event?

The total loan is huge - to quote the article, Kushner defined the top with this deal. $1.215billion is split into 8 different A-notes: Pari Passu loans A-1 & A-2 Notes ($124.5mm each securitized in GECMC 2007-C1), A-3 & A-4 Notes ($197.5mm each, securitized in WBCMT 2007-C31), A-5, A-6 & A-7 Notes ($142.75M each, securitized In WBCMT 2007-C33), and an A-5 Note ($142.75mm). These deals were brought to you by Wachovia and BoA, if anyone is keeping track - blame Charlotte this time.