Building owners face loan crisis - Atlanta Business Chronicle:

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The owners of about a dozeh Atlanta office buildings and shopping center s have less than a year before theid loanscome due, according to the Trepp/CMSA Database from . The database tracks how loanw backedby office, residential and retail properties are performing. Most owners are workingt with their banks to extenf theirpayment deadlines, or choosing to exercise payment extension clauses in their loan Some are trying to refinance. If owners are unable to come to an agreementg withtheir lenders, they can lose their buildings to as may happen to the Equitablre Building downtown. Atlanta Business Chronicle reported Feb.
20 that the landmark towet would likely become the firsft big casualty of thefinancial crisis. is foreclosing on the owned bySan Diego-based . It’s scheduled to be auctionedx May 5. A wide rangse of Atlanta property owners now face loomingdebt maturities, from publiclyt traded Corp. (NYSE: DDR) to prominent local real estatde investors such asRichard Bowers. All have encountered the same obstaclew — lenders’ unwillingness or inability to refinancs loans and a scarcity of buyers for commercial properties becaus capital markets remain predominantlylockee down.
“Banks are still not letting the capital back into the saidJeff Mixson, of Holder Properties and a recent president of Georgia’s chapter of the . “This is an over-correction,” Mixsonj said. “Well-leased, well-placed, well-owne d buildings are having troublegetting financing, and in some at least to the owners, it doesn’tf seem to make any sense.” In the 1355 Windward Concourse building is nearly 100 percentg leased with as the main tenant anchoring the But, owner Alpha United LLC is having difficultgy refinancing the remaining $11.
5 million balance on its loan with Capmark Financial, said Dennis Mitchell, a broker with who is marketin g the property to potential buyers. Like much of the maturingb debt, the Windward Concourse loan is rolled into a larger pool ofcommerciao mortgage-backed securities — a type of financin g that exploded in popularity in recen t years but that is now essentially shut down. Alphwa United has sought at leastan 18-montg extension on its loan payment, Mitchell said. “Mostg of the lenders would rather grant an he said. “How long they can keep doing that? Well, that’s the million-dollar question.
” Developers Diversifierd Realty, a real estate investment trust that owns 696shoppingv centers, has two centers in Atlanta with loanz that were set to mature this year. Its Heritagre Pavilion in Smyrna is nearly 94 percentf leased with tenants includiny PetSmartand T.J. Maxx. Developerse Diversified is part of a joingt venture on the shopping center with themajority owner. The originated by , has a $21 million balance, accordinhg to the Trepp database. It matures July 1. Developeres Diversified is trying obtaina one-year a spokeswoman said. Abernathy Square on Roswelol Road is 85percent leased, anchoredx by a Publix. The loan, also originater by Bear Stearns, has a $13.
4 milliobn remaining balance, according to the database. Developersw Diversified was granted an extension on the loanunti September, with an option to extenrd it through March 2010. In some cases, owners have guaranteecd extension clauses built into their originalloan agreement. Jim president and CEO of the condominiumdeveloper , said that his TWELV Atlantic Station — whose loan is due in Novembert — has multiple extension rights. Novare will likelyu exercise those options, a spokesman said. Bowers’ downtownb buildings, 270 Peachtree and Five Points have loans scheduled to mature in the next six according tothe database.
The loan backed by the 23-story 270 Peachtrede has a $33 million balance. The loan backerd by Five PointsPlaza — which houses the Atlantqa Department of Housing and Urban Developmenf — has a $12 million When asked about the maturing Bowers would say only, “I’v got it taken care of.” The firsft signs of trouble in Atlanta’s commercial real estate marke came earlier this year when Equastone Real Estatd Investment Advisors could no longer pay tenant improvementr allowances at the Equitable Building.
Equastone purchasedd the buildingfor $57 million in 2007, but was unablee to generate sufficient income on it as vacancyt soared to nearly 30 “Everyone is waiting for the commercial real estate shoe to Mixson said. “And maturing defaults are goinyg to be thebig question. But, the lenderd seem willing to work withthe owners.”