According to May remittance data received late last week, the $38.95 million The Mill loan was sent to special servicing. The loan is backed by a 111,393 square-foot office in Greenwich, Connecticut. The note makes up 1.2% of the collateral behind JPMCC 2007-LD11.
When the loan was securitized in 2007, the office property was 100% occupied. As of 2013, it was 91% occupied. However, the occupancy rate fell to 70% in 2014, and the DSCR dropped with it. The DSCR was 1.09x in 2013, but that slid to 0.97x last year.
The property was appraised for $52 million in 2007. Special servicer notes indicate that the loan is facing imminent default and that the borrower is looking for a modification.
Losses on the LD11 deal have already reached the C class. In addition to the concerns over The Mill’s transfer, the deal has $122 million in Hope notes and an appraisal reduction on the $70.9 million Healthnet Headquarters note.
2006 Loan Put on Watchlist as Lease Expiration Nears
As some of you may recall, the property behind the $340 million 125 High Street loan will be losing its top tenant in October. We were reminded of this when the loan was put on servicer watchlist this month. PricewaterhouseCoopers will be leaving the underlying 1.5 million square-foot Boston, Massachusetts property when its lease ends in the fall. PWC occupies 25% of the space in the building.
The note is the second largest loan behind LBUBS 2006-C6, representing 14.4% of the deal’s remaining collateral. The loan is current and matures in August 2016. In addition to the $340 million in CMBS debt, there is also $189 million in mezz debt according to the watchlist notes.
At securitization, the loan was underlevered to the CMBS debt. The appraised value at the time was $752.9 million, giving the loan an LTV of 45 to the senior debt. With the mezz debt, the all-in LTV was about 70. The note was underwritten with a DSCR of 1.77x on occupancy of 84%. The 2014 financials had DSCR at 1.63x and occupancy of 83% in 2012.
According to the original deal documents, PricewaterhouseCoopers’s base rent was almost $44 per square foot under the current lease. The sponsor of the loan was Tishman Speyer.
Compliments of Trepp, LLC – a Member of the EACCNY