• 23
  • September
    2010

A massive office tower, the seventy-six-story Columbia Center, has won a reprieve from its lender. Six months ago, the owners defaulted on a huge loan they took out in 2007 to buy the Seattle landmark.

Beacon Capital Partners, based in Boston, owes $380 million, and agreed to extend the interest-only loan by three years to 2015. Beacon's monthly payments will drop by 38 percent. Atlanta loan modification attorneys following the developments note that the building is forty percent "available" after the departure of former tenant Amazon, but speculate that foreclosure was not an attractive option for either lender or borrower.

Beacon's commercial loan modification has two one-year loan-extension options. If they end up exercising both extensions, they would not be required to pay back the principal until 2017.

Columbia Center has a million and a half square feet and is the Northwest's tallest building. The property was eighty-nine percent leased when Beacon paid $621 million for it in April 2007, in a booming real estate market. The building was recently appraised at $330 million.

The center's annual net operating income at the time of purchase was estimated at $31.8 million. By 2009 that had dropped to $19.4 million. $22 million is needed annually to service the debt.

The new deal gives Beacon some breathing room on payments. It also requires Beacon to put $30 million into a reserve account. Some of that probably will go to compensate bondholders for $10 million in missed payments since March.

Beacon's debt on loans for Columbia Center was considered the nation's largest delinquent commercial mortgage-backed securities loan until the modification.

Source: Seattle Times "Columbia Center loan modification cuts troubled tower's payments" 9/15/2010