Investor competition for the $50 million CMBS loan against the 222,246-square-foot Forum at West Paces in Atlanta’s Buckhead section that CWCapital Asset Management is offering is said to be red-hot. The buzz among some investors vying for the asset, which is being offered through Mission Capital Advisors, is that it will likely sell for a price in the high-$30 million range. Interest is so strong that some speculate the loan could sell for more than $40 million.
CWCapital Asset Management is offering for sale the $50 million nonperforming loan against the Forum at West Paces, a 222,246-square-foot office building in Atlanta’s Buckhead area. The Bethesda, Md., special servicer is offering the loan through Mission Capital Advisors, which last week started distributing offering material.
Friday, June 13, 2014
CWCapital Offers Soured CMBS Loan on Atlanta Office
CWCapital Asset Management is offering for sale the $50 million nonperforming loan against the Forum at West Paces, a 222,246-square-foot office building in Atlanta’s Buckhead area.
The Bethesda, Md., special servicer is offering the loan through Mission Capital Advisors, which last week started distributing offering material. The loan is held by CD, 2007- CD4.
The New York loan-sales adviser did not identify the loan it was selling other than to say it had a $50 million balance and was backed by an Atlanta office building. But individuals familiar with the offering confirmed the loan is secured by the Forum building, at 3290 Northside Parkway NW.
The loan has been in special servicing since last September because it was expected to default as a result of a major tenant departure. It is now classified as being in foreclosure and its collateral is overseen by a receiver.
Law firm Greenberg Traurig, which had occupied 87,352 sf, had vacated its space when its lease matured in May 2013. It moved to the Terminus 200 building.
The year before, the property had generated $3.9 million of net cash flow, according to servicer data compiled by Trepp LLC.
Now, the nine-story building is only 48.2 percent occupied. Remaining tenants include BNY Mellon Bank, which occu-
Reprinted with permission from Commercial Real Estate Direct
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pies 18,313 sf through 2018, and residential broker Atlanta
Fine Homes, which leases 14,500 sf through 2020.
The building was appraised last October at a value of $38.4
million, nearly half the $71.6 million value pegged to it in
2006. Morningstar Credit Ratings pegs a value of $34.6 mil-
lion on the property and estimates that the loan’s liquidation
would result in a loss severity of nearly 34 percent.
The building was developed in 2001 by Ben Carter Prop-
erties as the first phase of the Piazza at Paces complex, at the
corner of Northside Parkway and Howard Mill Road.
Ronus Properties, which is capitalized by European investors,
was Carter’s partner and took ownership of the property. Two
years ago, it sought to sell the property as an effort to sell all
of its U.S. holdings. It wasn’t successful selling it, but since has
sold a number of other assets, including Blue Back Square, a
448,877-sf mixed-use complex in West Hartford, Conn., that
was purchased by Starwood Capital Group for $106.3 million.
Vacant space at the Forum has been offered through Cassidy
Turley for $21.50/sf. It includes a five-story parking garage
with 646 spaces, a highly ranked restaurant, Local Three, and a
Mission Capital is inviting prospective investors to turn in
indicative bids on June 25. It will then host a final round of
bids on July 9. It aims to complete a transaction by July 25.
Mission Capital Advisors is seeing a rise in hotel financing opportunities. The NY-based advisory company recently arranged $15 million of first mortgage finance for the Palihouse West Hollywood, a 37-key boutique hotel, and has a number of other hospitality transactions in the pipeline, said Jordan Ray, managing director.
Mission Capital Sees Hospitality Transactions Rise
June 5, 2014 – Samantha Rowan
Mission Capital Advisors is seeing a rise in hotel financing opportunities.
The New York-‐based advisory company recently arranged $15 million of first mortgage finance for the Palihouse West Hollywood, a 37key boutique hotel, and has a number of other hospitality transactions in the pipeline, said Jordan Ray,
The property, owned by Beverly Pacific, is notable given a location that is close
enough to Sunset Boulevard to benefit from the bustle but far enough away to be
peaceful and private, Ray said, noting that he’d stayed at the property a number of times before Mission Capital got the financing assignment. The property is a long-‐ stay hotel, with kitchenettes in its rooms, and sees a lot of demand from Hollywood types, he added. The rooms range from studios to two-‐bedroom suites and also have washer-‐dryers.
Beverly Pacific acquired the property on an all-‐cash basis and sought the
financing in part to refresh the rooms and complete some capital improvements on
the roof of the building. Although Ray declined to disclose the lender, he noted that it was a regional bank. Pricing is in the low 200 area over LIBOR. The deal was well-‐ received in the capital markets and saw five or six serious bidders, he added.
Mission West, which recently opened a West Coast office with the hire of Gregg Applefield, found that having an executive on the ground in the city was key to getting the deal done quickly, Ray said.
“The hotel sector is definitely on the upswing. There is a lot of capital out there and
yields are getting compressed,” Ray said. “We’re seeing a lot of folks buying and
rehabbing assets and we’re also seeing some ground-‐up transactions.”