Southridge Mall (124mm - JPMCC 2005-CB11)

Southridge lost Steve and Barry's and Linens N Things to bankruptcy and occupancy was at 58% at the end of last year, and a 1.57x NOI DSCR was reported (still included part of the LNT rent, but still impressive). Per Barclays, they extended the maturity date from 4/2012 to 4/2015, and the borrower has committed to a $36mm renovation and leased the vacant space to Macy's.

All else equal, the extension pushes the life of the bond from April 2012 to January 2015, or further (Meridian Mark I & II is with the special and contributes partly to the paydown).

Met Park East ($79.7mm GSMS 2006-GG6) Modified

Barclays reported this Seattle office loan was extended to 11/2015 (from 11/2010), the borrower paid down $2mm of the note, $2mm into an T&I escrow account, an excess cash sweep will go into a rollover reserve, and the note will remain interest only at the original rate (5.54%).

They also noted the A2 should experience some extension risk... I'm getting a cost to the A2 of about 43 bps.

And the winner is...

The Starwood investor group—including TPG and Five Mile Capital Partners LLC—is proposing to put in more than $600 million in new equity, the people said. The rival plan had proposed as much as a $450 million investment from Centerbridge and Paulson.

But what will happen to the gargantuan $4.1b CMBS loan?

The Starwood proposal also calls for some of the existing holders of Extended Stay's $4.1 billion first mortgage debt to continue holding their debt, known in financial circles as "rolling" their positions.

extend, and ...

The Starwood-led plan puts a higher value—nearly $4 billion—on Extended Stay than other estimates that have emerged during the process, according to people familiar with the situation. Upon its bankruptcy filing, the company estimated its value at $3.3 billion. The company's financial advisers have pegged its value to be about $2.8 billion to $3.6 billion.

pretend.

It's not over yet, though

To be sure, the Starwood-led plan is still far from a done deal as Centerbridge and Paulson could increase their bid and other bidders also could emerge, the people said. And the plan still needs to be approved by the bankruptcy court.

$1.3 Trillion CRE Mortgages underwater

Bloomberg reports that roughly 1/3rd of the CRE mortgage market is underwater, but points out that many are still cash flowing just fine.

“The sad fact is that many of these assets are healthy performing assets,” said Dan Fasulo, managing director of Real Capital. “Conditions have changed so much in the lending arena that many owners are going to have significant troubles refinancing.”