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Monday, 04 April 2011

MPG Gives 1 Property to Lender, Sees Default at Another

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Commercial Real Estate Direct Staff Report

MPG Office Trust has placed two mortgages on properties it owns into special servicing, delivered a notice of imminent default on a third, and returned a fourth building to that project's lender.

Transferring the loans to special servicing allows MPG to start negotiating terms of possible loan modifications.

The Los Angeles REIT gave 701 N. Brand, with 131,129 square feet in Glendale, Calif., to the California Credit Union, the project's lender and largest tenant.

As part of that transaction, California Credit Union provided MPG with an undisclosed amount of cash and retained the REIT as property manager for up to 18 months. The transaction eliminated the building's $33.75 million mortgage, which paid a coupon of 5.87 percent and didn't mature until 2016.

The building was 97 percent leased as of the end of last year and generated $2.3 million of annualized rent. After expenses, that evidently wasn't enough to cover the mortgage's annual servicing requirement of $2 million.

The REIT, formerly known as Maguire Properties, also placed the loans on the US Bank Tower and Wells Fargo Tower into special servicing.

The $64.8 million loan on the US Bank Tower, with 1.4 million sf in downtown Los Angeles, is securitized through Bear Stearns Commercial Mortgage Securities Trust, 2004-TOP14. The building is encumbered by a total of $260 million of debt. It was 57.9 percent leased as of the end of last year and generated $19.2 million of annualized rent. Its mortgage debt has a servicing requirement of $12.3 million.

And the $550 million in debt on the Wells Fargo Tower, with 1.4 million sf in Los Angeles, is securitized through GS Mortgage Securities Corp. II, 2007-GG10. The property was 94.3 percent leased at the end of last year, when it generated $29.2 million of annualized rent. Its debt has an annual servicing requirement of $31.6 million.

In addition, the company issued a notice of imminent default on Gas Co. Tower. The 1.3 million-sf building in Los Angeles is encumbered by $458 million of debt that was evenly split and securitized through JPMorgan Chase Commercial Mortgage Securities Corp., 2006-LDP8, and Wachovia Bank Commercial Mortgage Trust, 2006-C28.

The property was 94.6 percent leased as of the end of last year and generated $34.7 million of annualized rent. Its debt has an annual servicing requirement of $23.7 million.

Separately, MPG had said in a recent regulatory filing that it had been actively marketing for sale several non-core assets, but that the process had taken longer than anticipated. Part of the reason for that is a tax-indemnification agreement it has with Robert F. Maguire, the REIT's founder, former president and chief executive. That agreement requires the REIT to cover his tax liability in the event it sells any properties through taxable transactions.

US Bank Tower, Wells Fargo Tower, and Gas Co. Tower are all included in the tax-indemnification agreement, which doesn't expire until June, at the earliest.

Comments? E-mail Anita Nolan or call her at (267) 247-0112, Ext. 212.



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Additional Info

  • Syndicate to Realpoint: No
  • Subject: Mortgages/Financing (MOR), Property Management (MGMT)
  • Deal Name: Bear Stearns Commercial Mortgage Securities Inc., 2004-TOP14, JPMorgan Chase Comm Mtg Securities Trust, 2006-LDP8, Wachovia Bank Commercial Mortgage Trust, 2006-C28, Wachovia Bank Commercial Mortgage Trust, 2007-Whale8
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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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