The $85 million loan on One Gateway Center in Newark, N.J., is in foreclosure, Commercial Observer has learned. The action was initiated on Oct. 13, sources familiar with the asset said.
The CMBS loan, also known as Gateway I, represents 66 percent of the remaining collateral in the Morgan Stanley-sponsored MSC 2007-IQ13 transaction,according to Trepp, whose data also shows that the asset’s loan now has a foreclosure status.
The loan was originated by Natixis Real Estate Capital in March 2007 and matured on April 5, 2017. It had a securitized balance of $95 million. According to the CMBS deal’s prospectus supplement, the sponsor at the time of securitization was Advance Realty Group, in which Rothschild Realty—through Five Arrow Securities—had made an investment of $60 million. Sources told CO that Rothschild (today renamed Almanac Realty) now has control of One Gateway’s ownership. Advance Realty continues to manage the property.
The loan transferred to special servicer LNR Partners in April for imminent maturity default. A refinance of the 10-year loan seemed to be on the horizon in May with sources telling CO that the move to special servicing had crossed paths with a refi that was contingent on the property’s largest tenant, law firm Gibbons P.C., renewing its lease. Gibbons used One Gateway as its headquarters, moving to the property in 2007 and occupying 119,865 square feet. According to a sources, Gibbons did renew its lease but the property’s net operating income was insufficient to support a refinance that would provide for a full payoff of the loan.
A spokesman for Advance Realty did not respond to a request for comment, nor did officials at Almanac Realty.