Building owners face loan crisis - Atlanta Business Chronicle:

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The owners of about a dozehn Atlanta office buildings and shopping centers have less than a year before their loanscome due, accordingv to the Trepp/CMSA Database from . The databasew tracks how loans backed by residential and retail propertiesare performing. Most owners are workingt with their banks to extend their payment or choosing to exercise payment extension clauses in their loan Some are trying to If owners are unable to come to an agreement with their they can lose their buildingsto foreclosure, as may happebn to the Equitable Building downtown. Atlanta Business Chroniclse reported Feb.
20 that the landmark tower woulrd likely become the first big casualt of thefinancial crisis. is foreclosingg on the building, owned by San Diego-basedx . It’s scheduled to be auctioned May 5. A wide rangee of Atlanta property owners now face loominhdebt maturities, from publicly trade d Corp. (NYSE: DDR) to prominent local real estate investors such asRichard Bowers. All have encountered the same obstaclesx — lenders’ unwillingness or inability to refinance loansd and a scarcity of buyerss for commercial properties because capitap markets remain predominantlylocked down.
“Banks are stilpl not letting the capital back intothe market,” said Jeff of Holder Properties and a recent president of Georgia’s chapter of the . “Thisd is an over-correction,” Mixson said. “Well-leased, well-owned buildings are having troublegettingy financing, and in some at least to the it doesn’t seem to make any sense.” In the 1355 Windward Concoursew building is nearly 100 percent leased with as the main tenanft anchoring the building. But, owne Alpha United LLC is having difficultyy refinancing theremaining $11.
t5 million balance on its loan with Capmark said Dennis Mitchell, a broker with who is marketinb the property to potential buyers. Like much of the maturing debt, the Windward Concourse loan is roller into a larger pool ofcommercial mortgage-backed securitiezs — a type of financing that exploded in popularityg in recent years but that is now essentially shut down. Alphs United has sought at leasyan 18-month extension on its loan Mitchell said. “Most of the lenders wouldc rather grant an he said. “How long they can keep doingb that? Well, that’s the million-dollaer question.
” Developers Diversified Realty, a real estate investmentg trust that owns 696 shopping has two centers in Atlanta with loanw that were set to mature this Its Heritage Pavilion in Smyrna is nearly 94 percent leaseed with tenants including PetSmartand T.J. Developers Diversified is part of a joint venture on the shoppingb centerwith TIAA-CREF, the majoritt owner. The loan, originated by , has a $21 million balance, accordinvg to the Trepp database. It matures July 1. Developerss Diversified is trying obtaina one-year a spokeswoman said. Abernathy Squares on Roswell Road is 85perceny leased, anchored by a Publix. The loan, also originatecd by Bear Stearns, has a $13.
4 milliobn remaining balance, according to the database. Developersa Diversified was granted an extension on the loanuntil September, with an option to extend it through March 2010. In some owners have guaranteed extension clausesx built into their originalloan agreement. Jim Borders, presidentt and CEO of the condominiumdevelopedr , said that his TWELVE Atlantic Station whose loan is due in November has multiple extension rights. Novare will likelyg exercise those options, a spokesman Bowers’ downtown buildings, 270 Peachtred and Five Points Plaza, have loans scheduled to mature in the next six according tothe database.
The loan backefd by the 23-story 270 Peachtree has a $33 millionj balance. The loan backed by Five PointaPlaza — which houses the Atlantas Department of Housing and Urbab Development — has a $12 million balance. When askes about the maturing debt, Bowers woulfd say only, “I’ve got it takenh care of.” The first signs of trouble in Atlanta’zs commercial real estate market came earlier this year when Equastonwe Real Estate Investment Advisors could no longer pay tenanrt improvement allowances at theEquitablr Building.
Equastone purchased the buildingfor $57 milliohn in 2007, but was unable to generated sufficient income on it as vacancy soared to nearlyu 30 percent. “Everyone is waiting for the commercial real estatr shoeto drop,” Mixson said. “And maturiny defaults are going to be thebig question. But, the lenderz seem willing to work withthe