Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Wednesday, 30 March 2011

Piedmont Moves Forward With Foreclosure Against Chicago Office

Written by 
Rate this item
(0 votes)

Commercial Real Estate Direct Staff Report

A foreclosure auction for 500 W. Monroe St., a 973,000-square-foot office building in Chicago owned by Broadway Partners will take place tomorrow at the law offices of Allen & Overy in New York.

Piedmont Office Realty Trust Inc., which holds two mezzanine loans that it carries on its books at a value of $61.1 million, had filed to foreclose on its position last summer. But Broadway successfully sued to block the effort. The auction is back on track.

Broadway had purchased the building in 2007 from Shorenstein Properties for $335 million. It turned to Morgan Stanley for up to $340.5 million of financing, nearly $200 million of which was comprised of four mezzanine loans.

A senior $140 million piece of debt is securitized through Morgan Stanley Capital I Inc., 2007-XLF9. Its maturity has been extended to August.

The 44-story building, built in 1992, was about 92 percent leased when Broadway bought it. But GATX Corp., which occupied 13 percent of the property, vacated when its lease matured, making the building unable to meet its debt-service obligation. The building includes a 1,300-car garage. It was on track to generate $14.7 million of net cash flow last year, according to servicer data compiled by Realpoint.

The mezzanine debt, which is technically backed by ownership interests in the Broadway affiliate that owns the building, is held by Piedmont, of Atlanta, CIT Group of Livingston, N.J., Washington Real Estate Holdings of Seattle and Transwestern Investment of Chicago, which also manages the property.

Piedmont is technically foreclosing on the second of four mezzanine loans, which indicates that the other lenders, as well as Broadway's equity position, have been wiped out.

According to a regulatory filing by Piedmont, Broadway had defaulted on the most junior mezzanine loan, which is believed to be held by Transwestern, in early 2009. But Transwestern and Broadway reached a forbearance agreement.

The entire debt stack had matured last August. That's when Piedmont filed to foreclose.

Comments? E-mail Orest Mandzy, or call him at (267) 247-0112, Ext. 211.


“The Weekly”

“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

  • Breaking mortgage, CMBS, and REIT news

  • Quarterly league tables with rankings of B-piece buyers, book runners, and lenders

  • Industry moves and changes in “The Insider“

Additional Info

  • Syndicate to Realpoint: No
  • Cities: Chicago
  • States: Illinois
  • Sector: Office
  • Subject: Bankruptcy/Foreclosure (BKRPT)
Read 364 times Last modified on Monday, 04 April 2011

Data Digest







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




cppichart FP



CMBS 2.0 Spreads


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





  • Challenging Retail Environment Weights on REITs
    Mixed economic news is weighing on retail markets, pushing REIT performance down in 2015. This week, the National Retail Federation announced that back-to-school spending is expected to be down 9.3% in 2015. This news came on the heels of a report from the Commerce Department stating that retail sales declined 0.3%...
  • US REITs Feeling Effects from Turmoil in Greece and China
    International economic forces have taken center stage this week, affecting both US stock markets and REITs. The crash in the Chinese stock market and ongoing concerns about the future of Greece in the eurozone drove markets down during the first half of the week. REITs fared better than the overall market...

  • What Does Increased Construction Mean for Apartment REITs?
    REITs so far this year have raised $17.1 billion of capital through the sale of unsecured notes, bringing the total raised over the past two and a half years to just more than $75 billion. That’s more than they raised during the previous five years. The massive volume shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark...
shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds