Much noise has been made in the press of late regarding the amount of CRE notes that are coming due in 2012. It would seem that 14 Wall Street represents the first note of note.
Bought at the height of the market in 2007 for $325M ($387/SF!), Capstone Equities is having no luck finding equity partners to be able to help make payments on the debt. Shorenstein Properties is poised to flex it's mezz muscles and take control of the property- leaving it with a great building and a messy debt structure to rework.
There is a silver lining in this otherwise grim tale (other than what must surely be some excitement at the Shorenstein offices). The Full Story below notes that Capstone's partner in the building- the Carlyle Group has written off it's investment. If more organizations admit their mistakes and take their lumps like the Carlyle Group has, then the unwinding of the remaining $5.6B in NYC CRE notes this year may be the much storied correction that the industry has been waiting for. Two years of 'extend and pretend' has not improved the debt fundamentals underlying the market.
Labels: Capstone, Carlyle, CRE, FiDi, Shorenstein