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
Noel Quinn, chief executive, HSBC Group; renderings of 66 Hudson Blvd (HSBC, Tishman Speyer)
HSBC eyeing move to Tishman Speyer’s Spiral
HSBC eyeing move to Tishman Speyer’s Spiral
Dan Garodnick (Getty, iStock)
Dan Garodnick to head City Planning
Dan Garodnick to head City Planning
Rob Speyer (President, Chief Executive Officer, Tishman Speyer) & Neil Shekhter (Founder, Chief Executive Officer, NMS Properties) (iStock, Tishman Speyer, NMS Properties, Illustration by Kevin Cifuentes for The Real Deal)
Tishman Speyer to build 620 units on Santa Monica sites
Tishman Speyer to build 620 units on Santa Monica sites
Clockwise from left: 2250 59th Street in Brooklyn, 249-26 Northern Boulevard in Douglaston, Queens and 906 Wortman Avenue in Brooklyn (Google Maps)
Industrial buyers can’t stop, won’t stop
Industrial buyers can’t stop, won’t stop
Blackstone's Stephen Schwarzman and 8 Spruce Street (Getty, Wikimedia)
Blackstone close to $930M purchase of Lower Manhattan apartment building
Blackstone close to $930M purchase of Lower Manhattan apartment building
Brookfield Asset Management CEO Bruce Flatt and Blackstone CEO Stephen Schwarzman with One Manhattan West (Getty, Brookfield)
Blackstone closing in on One Manhattan West stake
Blackstone closing in on One Manhattan West stake
Tishman Speyer buys pair of industrial assets in diversification play
Tishman Speyer buys pair of industrial assets in diversification play
Tishman Speyer buys pair of industrial assets in diversification play
Tishman Speyer selling Rockefeller Center Christmas tree (as an NFT)
Tishman Speyer selling Rockefeller Center Christmas tree (as an NFT)
Tishman Speyer selling Rockefeller Center Christmas tree (as an NFT)
arrow_forward_ios

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

Loading...