Capstone seeks help at 14 Wall Street
Capstone Equities is scouring the market for cash so it can repay the mortgage on its stake in 14 Wall Street before it comes due in May, Crain’s reported. If Capstone, which bought the 37-story, 1 million-square-foot building with the Carlyle Group for $325 million in 2007, doesn’t find a partner, mezzanine debt holder Shorenstein Properties will likely move in on its stake.
Carlyle has already written off the investment as a loss, according to Crain’s, so it isn’t helping in the search for another partner.
Capstone and Carlyle have struggled with the investment because they bought the property at the height of the market, expecting to be able to raise rents. However, office rents plummeted and the ownership group has been reluctant to lower rents to levels that could attract tenants in a slow leasing environment.
Capstone is one of many property owners likely to be soliciting investors as a huge swath of loans originated in 2007 come due this year. However, sources told Crain’s that Capstone values the building at about $300 million, or one-third more than its perceived value, hindering their ability to obtain that cash. [Crain’s]