$265M Loan on Stamford, Conn. Office Property Hits Special Servicing
The $265 million loan on 400 Atlantic Street in Stamford, Conn. has been transferred to special servicer C-III Asset Management for imminent maturity default, according to an alert from Fitch Ratings today.
The borrowers, a group of investors led by Alan Landis of Landis Group, have requested a loan modification—according to a bondholder familiar with the loan.
The loan comprises 19.1 percent of the remaining collateral in the Goldman Sachs and Morgan Stanley-sponsored GSMS 2007-GG10 commercial mortgage-backed securities deal. It was set to mature on June 6.
As previously reported by Commercial Observer, the loan on the 527,000-square-foot Class A office building was transferred to special servicing in the past, the first time in October 2014 when the borrowers learned that the property’s top three tenants—American Express, UBS and International Paper—would not be renewing their leases. Both International Paper and UBS subleased a significant portion of their space but the sublease tenants were paying rents significantly below the UBS and International Paper lease rates, according to Trepp.
The borrowers requested an A/B loan modification in May 2016 but then withdrew the request. The loan was then returned to the master servicer Wells Fargo in June 2016 but placed on the servicer’s watchlist less than a month later.
Constructed in 1980, 400 Atlantic Street comprises 487,000 square feet of office space, 5,000 square feet of retail space, a cafeteria, fitness center and a 908-space parking garage.
As of Dec. 21, 2016, the property was 99 percent occupied and had a debt service coverage ratio of 0.86x. The borrowers have had to offer significant free rent to secure new leases in accordance with market conditions, according to servicing commentary provided by Trepp.
Once a thriving financial services hub, Stamford has taken some big hits recently. Last month the $145.6 million loan on the UBS Center office complex was resolved with a loss of $100.4 million. AVG Partners, which also owns the UBS Center, purchased the defaulted CMBS loan against the 712,067-square-foot property for the bargain price of $54.2 million. The 13-story, 712,067-square foot building—former home of UBS’ trading floor—is located at 677 Washington Boulevard. At the time of securitization in 2003 the property was valued at $262 million.
Representatives for Landis Group did not immediately return a request for comment.