Friday, March 20, 2009

S&P Freaks Out After Learning 3 GGP Loans Transferred To Special Servicers

And if you are long any tranche of CMBS deals GCCFC 2004-GG1 and LB-UBS Commercial Mortgage Trust 2004-C4, you may want to freak out too. S&P just announced that it is monitoring these two loans "after learning that the loans for three General Growth Properties Inc. (GGP)-related malls that serve as collateral for the transactions were transferred to their respective special servicers on March 18, 2009, due to maturity defaults. The three GGP loans collateralized by three malls were transferred to the special servicer after representative borrowing entities notified the master servicer that they would not be able to repay the loans due to difficult capital market conditions. The borrowing entities have indicated that they are continuing to pursue various financing options."

This is likely just the tip of the iceberg as more and more properties, making up assorted loans, which in turn make up various CMBS pools, move to special servicing. And that is only for GGP... Which, one wonders, will have such an uphill battle to restore all the actions already taken place from the technical defaults on its loans and bonds. 5 pm today will be interesting.

A description of the properties in spec servicing below:

-- The Town East Mall loan is the third-largest loan in the LB-UBS 2004-C4 transaction and is with the special servicer, LNR Partners Inc. The loan has an unpaid principal balance of $105.4 million (9.4% of the pool) and is secured by 415,755 sq. ft. of a 1.3 million-sq.-ft. regional mall in Mesquite, Texas. The property was constructed in 1971 and most recently
renovated in 2004. The five-year loan has a coupon of 3.46% and is scheduled to mature on April 11, 2009. The master servicer reported debt service coverage (DSC) of 2.45x and 99% occupancy for the nine months ended Sept. 30, 2008.

-- The Southland Mall loan is the third-largest loan in the GCCFC 2004-GG1 transaction and is with the special servicer, CWCapital Asset Management LLC. The loan has an unpaid principal balance of $81.3 million (3.6% of the pool) and is secured by 1.0 million sq. ft. of a 1.3
million-sq.-ft. enclosed regional mall in Hayward, Calif. The property was constructed in 1964. The five-year loan has a coupon of 3.62% and was scheduled to mature on March 1, 2009. The master servicer reported a DSC of 2.69x and 98% occupancy for the nine months ended Sept. 30, 2008.

-- The Deerbrook Mall loan ($73.7 million, 3.3% of the pool) is the fourth-largest loan in the GCCFC 2004-GG1 transaction and is secured by 461,298 sq. ft. of a 1.2 million-sq.-ft. enclosed regional mall in Humble, Texas. The property was constructed in 1984. The five-year loan has a coupon of 3.46% and was scheduled to mature on March 1, 2009. The master servicer reported a DSC of 2.55x and 99% occupancy for the nine months ended Sept 30, 2008.

********UPDATE*********

This just out too: Citigroup Moves To Foreclose On General Growth Mall In New Orleans; $95M Mortgage That Wasn't Paid (0.50 +0.00)

Everyone is picking up on the foreclosure run... Sphere: Related Content
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7 comments:

general gorge said...

dude, this is quite a soap opera fo'sho...

as the GGP churns & burns

there's something going on that i can't quite decipher yet.

things aren't adding up to the obvious conclusion.

maybe we'll know by tonite tho yes?

11 by 7?

ts said...

Tom Friedman's gonna have to publish another crappy book.

Pete-0 said...

great example of what's wrong with CMBS - all 3 properties have very strong coverage & decent occupancy. Any other capital provider (life co, pension advisor, bank) would work something out.

maybe this is what Ackman is up to after all...

general gorge said...

"maybe this is what Ackman is up to after all..."

yup...a vulture disguised as an angel.

James said...

Has anyone noticed ARE today ? down a lot and looks like its going into a death spiral

Anonymous said...

there isnt any need to work anything out with GGP, because there is unlikely to be any loss to the three loans, and thus no loss to those cmbs deals. even if you hammer the cash flows that were reported on 9/30/08, and put a 10 cap on that, probably be able to sell properties for loan amount, and maybe more.

problem for GGP (and others who have maturing loans) is that to refi these loans they would likely need to inject capital (to achieve say a 60% LTV) to get a new loan, (if they could even find a loan since no one is lending anyway) capital they probably dont have.

Anonymous said...

here's the link to ggp's investment page:

http://www.ggp.com/Investment/

as we all know, tim goebel has now left the company. on his voicemail it leaves the number for a david keating and a cell phone number for someone else. mr. keating did not answer and the someone else left the company. it's very strange how senior staff are so readily accessible to the public.

in any case, i expect very, very big developments over the next two-three days. my best guess is a chapter 11.