Fitch downgrades 11 Madison, other loans

New York /
Feb.February 17, 2012 08:19 PM

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.In December 2010, Los Angeles-based CIM Group bought a 49 percent stake in the tower from the Sapir Organization for $469.4 million.

Credit Suisse occupies 82 percent of the space at the 2.2-million-square-foot office tower near Madison Square Park, and overall occupancies are stable. The loan pool, Credit Suisse Commercial Mortgage Trust, series 2006-C4 had an original balance of $4.22 billion, but the principal balance has shrunk by 7.9 percent.

The next largest contributor to the loan pool is the Babcock & Brown FX-3 Sonterra loan, backed by 14 properties totaling 3,720 units, in Nevada, Texas, Maryland, Florida and South Carolina. Fitch said the loan is in foreclosure and had a receiver named in August 2011.

CIM officials were not immediately available for comment and nor was a Credit Suisse spokesperson.


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