January 9, 2009
New York’s Broadway Partners has apparently defaulted on their loan on an acquisition they made back in 2006, according to a report in the Boston Herald. The acquisition of Hancock Tower in 2006 for $1.3 Billion was a landmark deal at the top of the market. Hancock Tower is a 60-Story, 1,755,398 square feet, Class-A office tower that Broadway Partners acquired on 12/28/2006.
The building is the tallest tower in New England and also features a 2,000 stall parking garage, and is home to tenants such as Deloitte & Touche, Investors Bank and Trust, Marsh and McLennan, Hill Holiday and Charles River Associates.
According to the article, Broadway Partners issued a statement yesterday in an attempt to reassure investors:
Despite difficult market conditions, we continue to work hard with our lenders and partners to address debt obligations,” the statement read. “In the meantime, Broadway Partners continues to operate great buildings with high service standards.
The article indicates that the lenders were Royal Bank of Scotland’s Greenwich Capital, and in the amount of $640M. In addition, Lehman Brothers had provided another $450M of debt for the acquisition.
Given those numbers and a weakening market, a sale would be insufficient to cover the debt and would likely result in Greenwich Capital Financial losing a lot of money should they have to take the asset over and dispose of it.
We previously wrote a piece on Broadway Partners back in October questioning Broadway and when their San Francisco assets would come into play.
Thanks to reader DD for the head’s up.
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