Tishman defaults in $1.7B Chicago deal

New York /
Dec.December 06, 2009 12:42 AM

A Tishman Speyer venture is in default on a mezzanine loan that was part of a $1.7 billion purchase of six Chicago office buildings comprising 5.7 million square feet, which marked the largest real estate deal in Chicago history, sources told Crain’s. Tishman bought the package of mortgages in 2007 at the top of the market from Blackstone Group, which flipped it as part of a $39 billion leveraged buyout of Sam Zell’s Equity Office Properties that year. Tishman is negotiating with the Federal Reserve Bank of New York to rework an estimated $1.4 billion in loans, set to come due next year, according to sources, and in response to the default, the Fed has frozen a reserve fund. “The lenders have delayed certain capital expenditures that already had been approved and that were required under the loan agreement,” Tishman said in a statement. If the buildings cannot get refinanced, they could become part of the growing wave of “zombie buildings,” which lack the money to cover brokers’ commissions and reconstruction.


Related Articles

arrow_forward_ios
Blackstone’s Stephen A. Schwarzman and Jonathan Gray (Getty)
These are the 10 largest real estate fundraisers of the last 5 years
These are the 10 largest real estate fundraisers of the last 5 years
Levered and loaded: KKR looks to flex its real estate muscle
Levered and loaded: KKR looks to flex its real estate muscle
Levered and loaded: KKR looks to flex its real estate muscle
(One Boerum Place)
Luxury rentals prove loan-worthy in outer boroughs
Luxury rentals prove loan-worthy in outer boroughs
Facebook parent grabs another 1M sf in Bay Area
Facebook parent grabs another 1M sf in Bay Area
Facebook parent grabs another 1M sf in Bay Area
KPF's A. Eugene Kohn and 11 West 42nd Street (Google Maps, KPF)
KPF expands at Tishman Speyer building after sweetener
KPF expands at Tishman Speyer building after sweetener
Tishman Speyer CEO Rob Speyer, Turner Construction CEO Peter Davoren and The Spiral at 66 Hudson Boulevard (Getty, Turner Construction, Tishman Speyer)
Build it and we will come: Turner Construction moves HQ to Tishman Speyer’s Spiral
Build it and we will come: Turner Construction moves HQ to Tishman Speyer’s Spiral
Tishman Speyer president Rob Speyer and Edgemere Commons (Getty)
Tishman Speyer grabs bulk of Arker’s mammoth, delayed project
Tishman Speyer grabs bulk of Arker’s mammoth, delayed project
Blackstone secures $1.1B refi on Sun Belt multifamily portfolio
Blackstone secures $1.1B refi on Sun Belt multifamily portfolio
Blackstone secures $1.1B refi on Sun Belt multifamily portfolio
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...