Over the past couple of weeks, Moody’s Investors Service has been downgrading more pools of commercial mortgage backed securities. And buried in releases of a couple of those downgrade notices comes word that a loan on famous New York City office building landmark has moved into special servicing.
The building is 666 Fifth Avenue and it was built in 1957 by Tishman Realty & Construction. It at one point had Citigroup as a major tenant, with a “Citi” logo replacing the numbers “666″ on the side of the building. Kushner Properties bought the building for nearly $1.8 billion near the top of the NYC real estate market in late 2006.
And now there appear to be some issues with that loan.
Moody’s, in downgrading some GE Capital commercial mortgage securities today, said the loan was transferred to special servicing in March of this year when the borrower requested a loan modification. Loans that are deteriorating in quality are usually transferred to a servicer to help with possible workout solutions. It’s likely that the loan modification helped avoid more serious troubles. The GE loan was $249 million of a $1.215 billion first mortgage loan made to Kushner.
Also today, Moody’s downgraded some Wachovia commercial mortgage securities and it noted a $395 million loan in this portfolio associated with 666 Fifth Avenue also being in special servicing.