February 16, 2010
Remember the Premier Retail Location by Santana Row we blogged about back in October? Well not surprisingly, the asset is now in default. On the one hand, only big rents can save this thing, but on the other what is the point of marketing it at a ridiculous rent and simply spinning your wheels?
Looking from the outside in, it seems that it would have likely been better to try and get a market rent deal locked and loaded, and then go to your lender with it and hope for salvation.
Anyhow, here’s the nitty gritty. 26,850 SF on ~ 39K SF of dirt and a $8M first, with $279K back, indicating the $8M was likely I/O. If that’s the case, this deal should be a reminder of all the I/O deals which were done.
Ironically, the FDIC has decided to make it a policy to look the other way so long as a lender can get I/O payments. In this case, we’re skeptical that will be possible here.
- Banks Quick to Adopt New FDIC Guidelines
- Investors Jostling for FDIC Assets
- Silicon Valley Office Space Continues to Get Cheaper
- FDIC Adopts Policy Statement on CRE Loans to Help Banks
- CRE Dominoes: 8000 Marina Blvd Defaults