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

Thursday, 25 February 2010

Manhattan Property Falls under Water as Loan Begins Amortizing

By John Covaleski, Commercial Real Estate Direct Staff Writer

After struggling to retain enough tenants to generate the income needed to pay down its loan, the former Newsweek Building at 1775 Broadway in Manhattan fell under water when the debt started amortizing last month.

The 618,122-square-foot office property, which covers a full block at 58th Street in midtown's Columbus Circle area, is encumbered by $250 million of debt that is securitized through Wachovia Bank Commercial Mortgage Trust, 2006-C23. The loan has been moved to the deal's special servicer, CW Capital Asset Management.

Joseph Moinian, a prominent New York investor, bought the building for $130 million in 1999 and obtained the financing in 2006. The debt carries a 5.66 percent coupon and matures in 2016.

The property, whose occupancy has dropped to 23 percent from 95 percent in 2006, had remained current on its debt when the loan required only interest payments. But the loan started amortizing last month, resulting in a larger mortgage bill, and the property missed that payment.

The loan is generating roughly $226,000 less cash per month than is required to service its monthly debt requirement. And it has only about $98,000 of reserves available to make up any shortfalls between its income and the debt service.

Moinian has a tenant lined up for about 5 percent of the building's vacant space, according to Realpoint, but that lease is not expected to generate enough additional rent to make up the debt-service shortfall.

The transfer of the loan to special servicing enables Moinian to meet with CWCapital and start workout negotiations. Possible outcomes would presumably include eliminating amortization, at least for a time.

Moinian is experienced at modifying his loans and has worked with Iron...


“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“

Data Digest







Top Bookrunners Domestic, Private-Label CMBS - 2016
Investment Bank #Deals Vol$mln MktShr%
JPMorgan Securities 14.94 10,350.16 15.14
Deutsche Bank 14.21 9,926.60 14.52
Wells Fargo Securities 13.36 9,513.96 13.92
Citigroup 10.87 8,061.79 11.80
Goldman Sachs 10.05 7,563.72 11.07




cppichart FP



CMBS 2.0 Spreads


Top CMBS Loan Contributors - 2016
Lender #Loans Vol$mln MktShr%
JPMorgan Chase Bank 133.67 8,670.33 13.34
Goldman Sachs 156.20 7,418.37 11.41
Deutsche Bank 178.17 6,510.75 10.02
Citigroup 184.41 5,512.20 8.48
Morgan Stanley 113.18 4,130.53 6.35





  • 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