Modifications,Short Sales,Deeds in Lieu,WriteDowns

Stretegic Defaults Commercial Style

Posted on Tuesday, January 26, 2010

"Tishman Speyer and BlackRock withheld their $16.1 million payment from senior mezzanine debt holders. At the time, the two companies said it was a strategic move to try and force the special servicer to restructure the debt.

Tishman and BlackRock purchased the complexes from MetLife in 2006 at the height of the market for $5.4 billion. Lenders for the project include the California Public Employees’ Retirement System, the Church of England, and the Florida State Board of Administration.

The decision by Tishman and BlackRock to forfeit the largest apartment complex in Manhattan is the latest in a string of so-called “strategic defaults” by investors. Last month, Morgan Stanley returned five San Francisco office buildings to its lender, two years after acquiring the real estate, in order to “get out of the loan obligation,” the company said. In early January, Sunstone Hotel Investors Inc. stopped making payments on a $246 million mortgage in order to return 11 U.S. hotels to Massachusetts Mutual Life Insurance Co."

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