Trepp Special Alert: A Dubious Distinction: 2007 Deal Becomes First Conduit to See Super Seniors Hit With Shortfall

NEW YORK, NY -- The MSC 2007-HQ13 deal earned the dubious distinction of becoming the first CMBS conduit deal to have interest shortfalls reach the super senior classes.

The HQ had stood for “High Quality” when the bonds were first issued, but bond owners might beg to differ.

The deal is one of the 25 CMBS issues that makes up part of the CMBX 5 Credit Default Swap Index.  Prior to the March remittance report which came out late Friday, shortfalls had reached the A-J class.  The latest remittance report had shortfalls hitting classes A-2, A-3, A-1A, and A-M, and X.

The deal is far from out of the woods and before all is said and done, losses could reach the tranches that were originally AAA.  Thus far, nine classes of bonds have been extinguished by collateral losses. That has made the F class – originally rated BBB plus – the first loss class.

 The F class’ balance has already been reduced by almost 75%. Still to be processed is a loss on the Pier at Caesars. 

That $80.5 million loan was carrying a $62.7 million appraisal reduction – enough to wipe out all bonds up to the A-J class. 

 This month that amount was bumped up to over $80 million – indicating a 100% loss (or more) is possible.  That would be enough to wipe out 25% of the A-J class.

The  interest shortfalls on the super seniors could be around for a while.  According to the March remittance report, the Pier loan still has $9.4 million in advances left to be reimbursed to the master servicer.  (We are not certain why any interest was paid to the super seniors at all, considering this number).

Contact:

Eric R. Gerard

Senior Vice President

Great Ink Communications

27 Union Square West, Suite 205

New York, NY 10001

(212) 741-2977

Net-Leased Grocery Store Portfolio Trades Hands in Texas

Stephen
Berchelmann

SAN ANTONIO, TX – Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm, has arranged the sale of a portfolio of 13 Lowe’s Markets located throughout Texas. The terms of the sale were not disclosed.

Chad Knibbe, a senior associate, and Stephen Berchelmann, an associate, both in Marcus & Millichap’s San Antonio office, represented the seller.

“The properties were brought to the market earlier this year and received multiple offers,” says Knibbe.  “The buyer, in an effort to jump ahead of the competition, put the portfolio under contract and closed the deal all cash within 10 days.”

Chad Knibbe

“This transaction shows the market’s appetite for quality net-leased assets,” adds Berchelmann. “Grocery stores are in especially high demand.”

Lowe’s Markets operates under a variety of names including Super S Foods, Super Save, Lowe’s Market, Big 8 Food Stores, Shop n’ Save, Lowe’s Pay N Save, Avanza Supermarket, Family Center, Fiesta Foods, Mercado, La Feria, Food Jet and Fiero.

The stores are located in Texas, New Mexico, Arizona and Colorado and range in size from 2,000 square feet to 65,000 square feet.

Contact:

Ben Johnson,

Marketing Director

(925) 953-1736

Marcus & Millichap Capital Corp. Arranges $15.5 Million Time-Sensitive Multifamily Refinance in Anaheim, CA

Michael Derk

 ANAHEIM, CA – Marcus & Millichap Capital Corporation (MMCC) has arranged a $15.5 million first trust deed to facilitate the purchase of an apartment community in Anaheim, Calif.

            Michael Derk, a vice president capital markets in MMCC’s Long Beach office, arranged the loan.

            “With interest rates at a historic low, the borrower wanted to take advantage of fixed debt to acquire a new property,” says Derk. “The deadline on the new acquisition was unusually tight at 40 days, and to add to the challenge, the underwriting and approval process ran through the holiday season when every day is at a premium with most lenders.”

            “MMCC leveraged its relationship with the lender to close the transaction by the required deadline,” adds Derk. “This resulted in the saving of more than $1 million in potential penalties and did so with better-than-market terms, in spite of the newly acquired asset’s history of mismanagement.”

            The 10-year loan amortizes over 30 years at a fixed rate of 3.5 percent.  The LTV is 77 percent.

Press Contact:

Marcus & Millichap Capital Corporation

(925) 953-1716