Rosen's Piece of Zell's Office Empire Takes Downward Dive
The Wall Street Journal reports: New York City real estate developer Aby Rosen is joining the long list of investors who have headaches from buying pieces of Sam Zell's $39 billion office building empire when it was dissolved in 2007.
Mr. Rosen, also is a well-known art collector and fixture in Manhattan society, paid $850 million back then for seven Stamford, Conn., office buildings. Now, the portfolio's value has plunged, and Mr. Rosen is in talks to modify the $300 million first mortgage secured by the properties.
In July, the loan, which was converted into commercial mortgage-backed securities, or CMBS, was transferred to a special servicer, a company that handles loans that are troubled and require attention. RFR Holding LLC, the New York-based firm founded by Mr. Rosen and his partner Michael Fuchs, said negotiations with lenders were due to a "minor required loan modification," and didn't involve a shortfall or default. The company declined to elaborate further. The special servicer, Centerline Capital Group, didn't respond to a request to comment.
Like many investors who bought at the top of the market, Mr. Rosen has seen the value of his Stamford properties fall sharply. He paid roughly $513 a square foot for the 1.6 million-square-foot portfolio. The property's value has dropped 30% or more, according to an estimate by Dan Fasulo, head of research for Real Capital Analytics.
The number of real-estate loans in special servicing is expected to increase sharply over the next few years as the commercial real-estate market deteriorates and the number of troubled loans rises.
View the full article on The Wall Street Journal: Rosen's Piece of Zell's Office Empire Takes Downward Dive
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Posted by: Matthew Stone