| Class | Fitch/MDYs | Size ($mm) | WAL (yrs) | C/E | Talk |
| A-1 | AAA/Aaa | 162.00 | 5.05 | 17.80 | +125 |
| A-2 | AAA/Aaa | 443.25 | 9.71 | 17.80 | +135 |
| B | AA/Aa2 | 22.08 | 9.91 | 14.80 | +230 |
| C | A/A2 | 31.28 | 9.91 | 10.50 | +300 |
| D | BBB/Baa3 | 34.03 | 9.93 | 5.90 | +400 |
| E | Ba2/BBB- | 13.80 | 4.00 | ||
| F | B2/B | 12.88 | 2.25 | ||
| G | NR/NR | 16.56 | 0.00 | ||
| X-A | AAA/Aaa | 605.25 | |||
| X-B | NR/Aaa | 130.62 |
Judge James Peck of the U.S. Bankruptcy Court in Manhattan initially approved Extended Stay's Chapter 11 restructuring plan in July, calling it "perhaps an unprecedented bankruptcy" involving entities "never expected" to file for bankruptcy protection.
| Class | S&P/Fitch | Size ($MM) | WAL | Subordination |
| A-1 | AAA/AAA | $266.70 | 4.27 | 18.25% |
| A-2 | AAA/AAA | $243.10 | 7.18 | 18.25% |
| A-3 | AAA/AAA | $390.50 | 9.79 | 18.25% |
| B | AA/AA | $37.20 | 9.89 | 14.88% |
| C | A/A | $53.70 | 9.91 | 10.00% |
| D | BBB+/BBB+ | $33.00 | 9.97 | 7.00% |
Deutsche Bank AG plans to sell $856.6 million of bonds backed by commercial mortgages, a person familiar with the offering said today. The securities are tied to 42 loans secured by 63 properties, said the person, who declined to be identified because terms aren’t public.
Boston Properties Inc. agreed to acquire the John Hancock Tower and Garage in Boston from private-equity firms Normandy Real Estate Partners and Five Mile Capital Partners for about $289.5 million, plus the assumption of about $640.5 million in debt.
Since the beginning of September, loan-sales advisers have taken offers on some $1.5 billion of loans that they have been marketing on behalf of their bank, special servicer and government-agency clients. And the expectation is that substantially more loans - as much as $3 billion or more - will be offered in the coming weeks.
...
Among special servicers, LNR Partners, CWCapital Asset Management, C-III Asset Management and Midland Loan Services are each said to be preparing the sale of loans.
LNR will be offering $200 million of hotel loans through Jones Lang LaSalle and another $100 million of small-balance hotel loans through an auction venture of JLL and REDC. It will also be offering roughly $150 million of additional loans through DebtX.
Earlier this year, it [LNR] orchestrated the sale of a $1 billion portfolio that was comprised largely of small-balance loans. Those loans were sold through Eastdil Secured to four investor groups. But instead of going the bulk-sales route this time around, the Miami company is looking to sell loans individually.
CWCapital, meanwhile, will take bids for $207 million of loans later this month through Mission Capital. It has also offered loans through CB Richard Ellis and Eastdil.
This year, the former partner at lobbying firm Patton Boggs LLP also found a unique solution to an even bigger housing problem: getting money back for investors in residential mortgage-backed securities that went bad. Franklin created a clearing house where investors can pool claims and potentially create the necessary legal clout to force mortgage lenders to buy back improperly made loans at the heart of the securities.
Before Franklin’s innovation, investors in such securities had no way of knowing who other investors were. Franklin’s approach may cost banks such as Bank of America Corp. billions of dollars. Lenders can be required to buy back securitized mortgages if they misrepresented their quality.
| Class | S&P/Fitch | Size ($MM) | WAL | Subordination |
| A-1 | AAA/AAA | $266.70 | 4.27 | 18.25% |
| A-2 | AAA/AAA | $243.10 | 7.18 | 18.25% |
| A-3 | AAA/AAA | $390.50 | 9.79 | 18.25% |
| B | AA/AA | $37.20 | 9.89 | 14.88% |
| C | A/A | $53.70 | 9.91 | 10.00% |
| D | BBB+/BBB+ | $33.00 | 9.97 | 7.00% |
Invesco has stepped up to the plate to win 100 Fifth Ave. for $93.5 million, while 183 Madison is going to Peter Armstrong's Rigby Asset Management with his partner, the Argentinean fund IRSA, for $75 million.
Pricing for 183 Madison on the southeast corner of 34th Street came in at $305 for 246,000 feet, while 100 Fifth's 258,000 square feet in the Union Square area ratcheted a bit higher at $360 a foot.
With a loan maturity looming, Younan Properties has refinanced 4041 Younan Plaza, a 20-story, 405,693-square-foot office building located in downtown. The Woodland Hills, CA-based owner obtained the five-year, fixed-rate loan through a new conduit program with Deutsche Bank and used the proceeds to buy out the class A office tower’s largest investor.
...
“We were surprised by the availability and the terms of the CMBS loan,” Younan admits, adding that the new conduit loan provided 70% LTV and an interest rate near 5%. “We did not know CMBS was active because these days you’re not sure of anything. We learned that CMBS is coming back to life, and that a lot of banks are originating and able to package them.”
Miami-based Lennar Corp. posted a profit for its fiscal quarter ending Aug. 31, thanks in part to the work of Rialto Investments, its division dedicated to acquiring distressed assets.
In February, Rialto teamed up with the Federal Deposit Insurance Corp. to acquire a 40% equity interest in 5,500 loans that had been originated by two dozen banks seized by the federal government. Rialto paid $243 million for its share of the loans.
A good example of that would be Peter Cooper Village and Stuyvesant Town - that was something that the agencies wouldn't issue a traditional mortgage for because it was underwritten with very little equity and at a relatively low debt service coverage ratio. That's really the prime example of where an apartment operator wouldn't go to Fannie and Freddie to get a mortgage at the peak of the market because they couldn't, because it didn't meet Fannie and Freddie underwriting standards. So they went to the CMBS market, and that's why, in my opinion, to some degree apartment CMBS has had weaker performance than non-apartment CMBS debt.
Aug. 20 (Bloomberg) -- Pershing Square Capital Management LP and Winthrop Realty Trust set a new date for a foreclosure auction on New York’s Stuyvesant Town-Peter Cooper Village after a judge halted a sale planned for next week.
The auction will take place Sept. 8, pending the resolution of a lawsuit brought by the property’s senior mortgage lenders, who object to it, according to letter filed in New York State Supreme Court today.
Pershing, led by Bill Ackman, and Winthrop had sought an Aug. 25 foreclosure auction after buying mezzanine debt on the property, Manhattan’s biggest apartment complex. Senior lenders filed a lawsuit claiming that the venture may not move to take
over the 80-acre apartment complex until the mortgage holders are paid the $3.66 billion they are owed.
The issue is based on a single JPMorgan loan collateralized by 72 retail properties in 20 states, with tenants including The Kroger Co., Kmart, Burlington Coat Factory and Big Lots, Realpoint said. The borrower is Centro NP LLC, a unit of Centro Properties Group, a U.S. and Australian mall owner.
....
Realpoint said the issue has a loan-to-value ratio of 78.7 percent, based on the "loan cut-off balance" and an aggregate property value of $616.3 million. Its debt service coverage ratio would be 1.64 times.
The company said it expected to have to pay out $230 million over time on insurance for CMBS — commercial mortgage backed securities. As Rob Haines of CreditSights pointed out, the company in the past claimed that portfolio was “nearly bulletproof,” although it did cite a $123 million number three months ago. But officials then played down that number, saying they still thought the most probable result was that, in the end, there would be no losses on CMBS exposure.
certain debt coverage ratios have deteriorated in this sector.
The joint venture paid $45 million for the senior-level mezzanine debt and began foreclosure proceedings on the property, the companies said today in a statement. Pershing Square, based in New York, owns 77.5 percent of the venture.
The undersigned commercial real estate industry associations strongly support the Community Recovery and Enhancement Act (CRE Act), important legislation introduced by Congresswoman Shelley Berkley to help incentivize equity investment in distressed commercial real estate assets and to address the pending crisis threatening community banks that currently hold significant real estate debt on their books.
According to the February 11, 2010 report by the Congressional Oversight Panel on the Troubled Asset Relief Program, small and mid-sized banks will bear the brunt of coming losses on commercial real estate loans. The report found that nearly 3,000 banks have concentrations in commercial real estate loans, including 2,115 banks with $100 million to $1 billion in total assets. Banks hold $1.5 trillion, or 45 percent, of the $3.4 trillion of commercial real estate debt in the U.S.
We believe that the CRE Act is a thoughtful and targeted solution to the current credit crisis in commercial real estate. This legislation will enable banks to convert troubled loans into performing assets through modest tax incentives to attract new equity capital to existing commercial real estate projects. The new investments would be specifically used to pay down debt, resulting in lower loan-to-value ratios of existing loans as well as improved debt coverage ratios. Importantly, the CRE Act relies upon market factors and economic incentives, rather than direct government involvement, to determine winners and losers.
Under this temporary tax incentive proposal, qualifying investments must be made before 2013 and only applies to assets purchased before 2009. At least 80 percent of the newly invested project capital must be used to reduce the outstanding balance of debt on the asset, with the balance going toward capital improvements, such as energy efficiency enhancements or leasehold improvements to attract new tenants. The new investment would qualify for a one-time 50% bonus depreciation and investors would be able to deduct any losses associated with the qualifying investment without regard to the passive loss limitations under Section 469 of the IRS Code.
We believe that this proposal has been carefully crafted and will help rebalance the debt vs. equity equation plaguing the commercial real estate and community banking industries. By giving lenders the ability to responsibly refinance debt and rebalance capital reserve levels, the CRE Act will provide the opportunity for additional lending capacity that will help stimulate lending to small businesses, job formation and economic growth in communities across the country.
Signed,
International Council of Shopping Centers
National Multi Housing Council
National Apartment Association
National Association of Realtors®
Institute of Real Estate Management
CCIM Institute
Associated General Contractors
Society of Industrial and Office REALTORS®
| Class | DBRS/Mdy | Size($mm) | WAL(yr) | CE% | Guidance | Launch px/sprd |
| A1 | AAA/Aaa | $ 232.00 | 4.96 | 18.50% | S+130a | $103/+125 |
| A2 | AAA/Aaa | $ 410.62 | 9.86 | 18.50% | S+140-145 | $103/+135 |
| B | AAA/Aa2 | $ 27.60 | 9.9 | 15.00% | S+200-225 | $103/+190 |
| C | AA/A2 | $ 35.48 | 9.9 | 10.50% | S+275-300 | $101/+265 |
| D | BBB(high)/Baa3 | $ 35.48 | 9.9 | 6.00% | S+375-400 | WAC/+400 |
Analysts at Deutsche Bank found that the number of new transfers into special servicing will continue to outpace commercial loan workouts. But once properties are ready for liquidation, valuations on commercial real estate are missing the mark, according to Deutsche Bank. More recent appraisals are needed on these properties to narrow the gap between liquidation expenses and proceeds.
The analysts projected an 18% delinquency rate on CMBS.
The hotel company, laboring under $1.42 billion in debt, holds interests in 72 upscale and midprice extended-stay hotels operated under brands such as Marriott, Hyatt and Hilton. The hotels are spread across 19 states and Washington, D.C.
...
took on hundreds of millions of dollars in debt in a $1.5 billion buyout by Apollo Investment Corp. Apollo Investment, which receives advisory services from an affiliate of private-equity firm Apollo Global Management, purchased the hotel company around the top of the market in 2007. Apollo declined to comment.
The loans were then carved up and sold to investors as collateralized mortgage-backed securities.
The Seattle building, known as Second & Seneca, has been about 15 percent vacant since Washington Mutual Inc. left after its 2008 bankruptcy filing, according to data compiled by Bloomberg. The loan was transferred to a special servicer last year to facilitate restructuring talks.
Tishman Speyer invested $15 million of new equity, according to a person with knowledge of the matter who asked not to be identified because the announcement was not yet public.
The debt restructuring “ensures that the property has sufficient capital to lease the property to stabilization and create long-term value,” said Jerry Speyer and Rob Speyer, co- chief executive officers of Tishman Speyer, in an e-mailed statement. The debt matures in 2017, according to the statement....
Tishman Speyer, based in New York, bought the property for $230 million in April 2007 and it was appraised at $125.2 million in 2009, according to King County property records. The loan was bundled into a commercial mortgage-backed security.
The property at 1191 Second Ave. includes a 436,752-square foot (40,576 square meter) Class A office tower and a four- story, 74,712-foot building and data center. The property was built in 1991. Safeco Corp., a Seattle-based home and automobile insurer, is the largest tenant.
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