Comerica Bank Tower Needs Some Help
This hasn't been a good week for 1717 Main Street: First, TM Advertising announced it's moving out and heading to Victory Park, which didn't faze Downtown Dallas Inc. CEO John Crawford. And then, this morning, The Wall Street Journal is reporting that Metropolitan Real Estate, which bought the downtown high-rise, designed by Philip Johnson and John Burgee and built in 1987, has "been placed under the oversight of a special servicer that deals with troubled loans," according to Fitch Ratings.
What's the problem? Well, according to Eliot Brown, when Metropolitan Real Estate bought the tower at the end of '06, it ...
...put on a hefty $180 million mortgage, according to loan research service Trepp LLC. While the owners have been able to cover their debt service up until now, they have reported to creditors that a major tenant is not expected to renew its lease later in the year, according to Trepp. Facing an expected drop in revenue from the 1.5 million square foot tower, Metropolitan is looking to modify its loan, which matures in 2017.
Metropolitan had hoped it would have been able to raise rents since the purchase, but that didn't happen.
As of late 2009, the latest info available, the property's net income was $15.3 million, below the $18.3 million ultimately expected, according to Trepp and deal documents.
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