Building owners face loan crisis - Atlanta Business Chronicle:

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The owners of about a dozen Atlantq office buildings and shopping centers have less than a year beforre their loanscome due, accordinfg to the Trepp/CMSA Database from . The databasw tracks how loans backed by residential and retail propertiesare performing. Most owners are workinb with their banks to extend their payment or choosing to exercise payment extension clauses in theierloan agreements. Some are trying to refinance. If ownerws are unable to come to an agreemenyt withtheir lenders, they can lose their buildings to as may happen to the Equitable Building downtown. Atlanta Business Chronicle reported Feb.
20 that the landmarok tower would likely becomee the first big casualty of the financial crisis. is foreclosing on the building, ownes by San Diego-based . It’s scheduled to be auctioned May 5. A wide rangre of Atlanta property ownere now face loomingdebt maturities, from publicly traded Corp. (NYSE: DDR) to prominenf local real estate investors such as Richard All have encountered the sameobstacles lenders’ unwillingness or inability to refinance loans and a scarcith of buyers for commercial properties because capital marketsz remain predominantly locked down.
“Banks are stilol not letting the capital back into the saidJeff Mixson, of Holder Properties and a recentf president of Georgia’s chapter of the . “This is an over-correction,” Mixsomn said. “Well-leased, well-placed, well-owned buildings are having trouble getting and insome cases, at least to the it doesn’t seem to make any In Alpharetta, the 1355 Windwarcd Concourse building is nearly 100 percent leased with as the main tenan anchoring the building. But, owner Alpha United LLC is having difficulth refinancing theremaining $11.
5 milliob balance on its loan with Capmarm Financial, said Dennis Mitchell, a broker with who is marketing the property to potentiakl buyers. Like much of the maturing the Windward Concourse loan is rolled into a largetr pool ofcommercial mortgage-backed securitiexs — a type of financing that explode in popularity in recent yearsz but that is now essentialluy shut down. Alpha United has sought at leastan 18-monthb extension on its loan payment, Mitchell said. “Most of the lenderas would rather grantan extension,” he “How long they can keep doingv that? Well, that’s the million-dollar question.
” Developers Diversifiefd Realty, a real estate investment trust that owns 696 shoppinv centers, has two centers in Atlanta with loansx that were set to mature this year. Its Heritager Pavilion in Smyrna is nearly 94 percent leasef with tenants including PetSmartand T.J. Maxx. Developerd Diversified is part of a joint ventures on the shopping center with themajority owner. The loan, originatedr by , has a $21 million balance, accordingb to the Trepp database. It maturees July 1. Developers Diversifies is trying obtaina one-year extension, a spokeswoman Abernathy Square on Roswell Road is 85 percentt leased, anchored by a Publix. The also originated by Bear Stearns, has a $13.
e4 million remaining balance, according to the database. Developersw Diversified was granted an extension on the loanuntilp September, with an option to extend it througn March 2010. In some cases, owners have guaranteecd extension clauses built into theirt originalloan agreement. Jim Borders, president and CEO of the condominiundeveloper , said that his TWELVE Atlanticf Station — whose loan is due in November has multiple extension rights. Novare will likelh exercise those options, a spokesman said. Bowers’ downtowjn buildings, 270 Peachtree and Five Points Plaza, have loansd scheduled to mature in the next six according tothe database.
The loan backe d by the 23-story 270 Peachtree has a $33 millioh balance. The loan backed by Five PointsPlazaz — which houses the Atlantaa Department of Housing and Urban Development has a $12 million balance. When asked aboutg the maturing debt, Bowers would say only, “I’vwe got it taken care of.” The first signds of trouble in Atlanta’z commercial real estate market came earlier this year when Equastons Real Estate Investment Advisors could no longe r pay tenant improvement allowances at theEquitabld Building. Equastone purchased the buildingfor $57 million in but was unable to generates sufficient income on it as vacanct soared to nearly 30 percent.
“Everyone is waiting for the commercial real estat e shoeto drop,” Mixson said. “And maturingf defaults are going to be thebig question. But, the lenders seem willing to work withthe owners.”