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

Wednesday, 30 September 2009

Venture Plans Condo Conversion for Manhattan Apartment Portfolio

Commercial Real Estate Direct Staff Report

Unable to de-regulate the rent-stabilized units in a portfolio of 1,083 Manhattan apartments, a venture of Praedium Fund VI and Pinnacle Group International is looking to convert the units to for-sale condominiums.

The venture is looking to pare down the portfolio's $192 million of debt, which is securitized through GE Commercial Mortgage Corp., 2007-C1. It is negotiating the details of the proposed conversion with the deal's special servicer, LNR Partners Inc.

Even if a condo conversion is approved, analysts doubt that the sale of individual units would generate enough proceeds to fully retire the debt, which carries a rate of 6.2 percent and May 2012 maturity.

The loan was originated with a $28 million reserve, but because its collateral doesn't generate enough cash flow to fully service its annual $12.4 million debt requirement, the reserve has been whittled down to $7.9 million.

The property last year generated only $4.7 million of net cash flow, down from $5.2 million in 2007. This year, it's on a run rate to generate $3.3 million of...


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Data Digest







Top Bookrunners
Private-Label CMBS - FY2014
Inv Bank #Deals Bal $mln MktShr%
Deutsche Bank 27.1  23,479.37 26.3
JPMorgan 18.6  13,752.01 15.4
Wells Fargo 17.2  13,085.05 14.6
Goldman Sachs 9.0  7,896.25 8.8
Citigroup 9.1  7,526.97 8.4





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Top Loan Contributors
Private-Label CMBS FY2014
Lender Vol $mln MktShr%
Deutsche Bank 14,005.13 16.0
JPMorgan 11,440.63 13.0
Wells Fargo 5,849.16 6.7
CCRE 5,750.69 6.6
Citigroup 5,604.13 6.4