11 Madison Avenue
Fitch Ratings today downgraded nine classes of a $3.9 billion pool of loans led by 11 Madison Avenue, a 29-story office tower and U.S. headquarters for Credit Suisse.
Fitch said the 11 Madison loan, representing 20.7 percent of the pool, may default upon maturity as pro-forma cash flow that was predicted will be difficult to achieve. Fitch said that while the loan is currently performing, asking rents have fallen below the expected amounts when the loan was originated. [more]
Fitch Ratings downgraded two ratings on home builder PulteGroup this week as a result of the lifeless housing market, Housing Wire reported. PulteGroup’s issuer default and senior unsecured debt ratings were shifted to BB from BB+ yesterday in light of a softening economy and subdued growth expectations in housing for the rest of 2011 and 2012.
PulteGroup reported second-quarter losses of $55.4 million, or 15 cents a share, as it took significant organizational restructuring and debt repurchase charges for the quarter.
“If the economy continues its currently lackluster advance and a relatively modest number of jobs are added, housing metrics should moderately decline this year, a more bearish forecast than earlier in the year,” Fitch analysts said. “Fitch is projecting a modest improvement for housing off a very low bottom in 2012.” [Housing Wire]
Fitch Ratings said it expects a loan backed by the Jumeirah Essex House to take a loss as the loan is scheduled to mature in September. The loan represents 15.2 percent of a UBS Commercial Mortgage Trust series 2007-FL1, and the property is the largest of 11 loans expected to take a loss in the pool. The 515-room Essex House, at 160 Central Park South, underwent a $91 million conversion to partial condominium in 2007, and has struggled amid less-than-expected income, Fitch reported. [more]
With interest rates poised to rise, lenders and investors in the nation’s $6.8 trillion mortgage-backed securities market will be exposed to significantly more risk, according to a new report from Fitch Ratings. The agency said yesterday that rates are likely to rise over the next several years as a result of record levels of U.S. debt and the beginnings of an upswing in 10-year Treasury yields. For investors in MBS, that means “heightened price volatility, particularly [for] those that are highly leveraged, fund through repo markets, or mark-to-market their holdings,” Fitch said. TRD [more]
Fitch Ratings said it downgraded 12 classes of a $2.75 billion Morgan Stanley
commercial mortgage loan pool, led by expected losses at 1500 Broadway, Lincoln
Square retail center and a retail mall near Orlando, Fla.
The largest contributor to the expected loss is Oviedo Marketplace, which
includes 435,000 square feet of a 953,000-square-foot regional mall in Oviedo,
Fla., located 15 miles northeast of Orlando. Fitch said the loan was transferred to
special servicing when General Growth Properties, one of the nation’s largest mall
operators, included the property in its bankruptcy filing.
The property was later taken over by CW Capital. [more]
Fitch Ratings upgraded the issuer default ratings of iStar Financial, citing the lender’s
recently announced $2.95 billion credit agreement, which
lowered the amount of debt coming due in June.
The funds are comprised of two credit lines that will help iStar extend its debt payments
until 2013 and 2014. The Manhattan-based lender had warned of a potential collapse
unless it was able to extend the deadline on its payments. [more]
Newly scheduled residential foreclosure auctions in New York City hit another low in January, continuing the downward trajectory that began in the aftermath of the so-called “robo-signing” controversy late last year.
According to new data from PropertyShark.com, which tracks the number of foreclosure auctions scheduled for the first time there were just 106 such filings in January, down from 247 in October 2010, when the scandal surfaced and lenders began to impose temporary foreclosure freezes. The city’s peak was 473 newly scheduled foreclosure auctions in June 2009.
Each building class — including co-ops, condos, single-family homes and two-family homes — saw similarly dramatic declines in scheduled auctions of between 40 and 60 percent on a year-over-year basis.
[more]
Loan modifications are declining to the point where eventual foreclosures for distressed U.S. homeowners are becoming all but certain, if somewhat delayed, according to a report from Fitch Ratings, released yesterday. Just 36,500 mortgage modifications were completed in December 2010, down from a high of 86,500 in April 2009, the report says, and Fitch says it expects the majority of those modified borrowers to default again within one year, which could lead to another spike in foreclosures. TRD [more]
Financial rating firm Fitch Ratings said today the special servicer at Stuyvesant Town plans to begin the renovation of 570 vacant units at the sprawling complex on Manhattan’s East Side. (Click here to see story posted Jan. 25 for more details.) CWCapital, the special servicer at the 11,227-apartment complex located on 80 acres, formally took control of the property in October. That same month it designated property manager Rose Associates as operator of the buildings, which are 95 percent leased. (note: clarification made) TRD [more]
IStar Financial, the battered, Manhattan-based commercial property lender that’s been attempting to stave off a bankruptcy filing in recent years, may actually succeed. According to the Wall Street Journal, the company has already managed to unload several assets at decent prices and as a result, has slashed its debt level by $3.7 billion over the past 12 months. IStar, whose shares have bounced back from below $1 last February to $8.20 yesterday, still has to refinance $2.2 billion in debt that’s due in June, however, and analysts say that will be no small feat. [more]
