MARK HESCHMEYER, EDITOR SEPTEMBER 30, 2010 WWW.COSTAR.COM
A WEEKLY COLUMN FOCUSING ON DISTRESSED MARKET CONDITIONS, COMMERCIAL REAL ESTATE PROPERTIES,
MORTGAGES AND CORPORATIONS PUBLISHED BY COSTAR NEWS
IN THIS WEEK'S ISSUE:
Uncertainty Weighs Heavily Over Industry's Fourth Quarter Outlook ................................................................................................ 1
Blockbuster Files Chapter 11; Immediately Closes 145 Stores ....................................................................................................... 10
Rite Aid Looking for Savings Among its Brick & Mortar ................................................................................................................... 14
Ashley Stewart Parent Files Chapter 11, Seeks Buyer.................................................................................................................... 16
JPMorgan Packages Retail, Office Loans into a New CMBS .......................................................................................................... 16
Benihana Chain Goes Up For Sale ................................................................................................................................................. 17
More Banks Under the Gun To Raise Money, Be Sold, or Face a Worse Fate ............................................................................... 18
Syringa Bank in Boise Required To Raise Money, Jettison Bad Assets.......................................................................................... 18
Two More Banks in Florida, Washington Closed and Sold.............................................................................................................. 19
Starwood, Kaufman Jacobs and JPMorgan Reorganize Rubicon US REIT .................................................................................... 21
Real Money: Note Purchases & Sales............................................................................................................................................. 21
Under Investigation, Amedisys Consolidating Operations ............................................................................................................... 23
VeriSign Cancels 180,000-SF Lease............................................................................................................................................... 23
Local Closures & Layoffs ................................................................................................................................................................. 24
Loan Maturities: Mezz Loans Due in October.................................................................................................................................. 25
Watch List: Mezz Loans in Special Servicing .................................................................................................................................. 26
Uncertainty Weighs Heavily Over Industry's Fourth Quarter Outlook
Momentum Shifting, but Unease Over Near-Term Market Prospects and Light Deal Volume Causing
Hand-Wringing by Investors, Lenders and Tenants
Typically by October, the commercial real estate industry can see its way clearly through the end of the year,
with a pretty good idea of what can be accomplished and how the rest of the year will play out. But these are not
usual times. The loads of uncertainty and constantly shifting market conditions that characterize this fourth
quarter are making it very difficult to muster any certainty over what the coming months will bring.
Just a few weeks ago, the markets were abuzz with the specter of a double-dip recession. But those worries
have largely subsided and replaced by signs that the capital markets may finally be loosening up. Then there are
the upcoming politically charged elections and the prospects of a shift in the regulatory and legislative
Want more uncertainty? Consider that buyers and sellers still can't seem to narrow the gap in their pricing
expectations. Couple that with banks and loan servicers collectively having no clear strategy for dealing with
problem assets and pending maturities, and what you get is much indecision on the part of investors, lenders
and tenants resulting in a lot of hand-wringing over both the near-term and long-term by CRE folk.
We queried a random sample of CoStar Group news readers about their outlooks and goals through the end of
the year, asking what do they see that is standing in the way of accomplishing those goals, or, conversely,
helping to achieve them.
While their answers range from the extremes of depressing to upbeat, in general, there seems to be a sense that
the markets continue to have momentum away from the past two years, but there is still very little deal flow or
jobs to support that momentum.
In addition, there may not be deal-flow going forward to support it either. Banks and loan servicers have been
pushing their "problem loans" further out into the future and are only now getting around to taking them through
the foreclosure process.
THE WATCH LIST NEWSLETTER 1
Meanwhile, there is an "astonishing, almost stupid" amount of money sitting around waiting to pick up deals. But
sellers don't want to put bargain prices on their properties, according to one real estate consultant.
And as one broker told us: "it is the toughest market I have ever seen in 30 years. I've just in the last few days
given up on all of my goals of completing any new transactions this quarter. (Instead,) I'm going to exercise a
great deal more, concentrate on getting off of the computer, away from the cable news, and lower my stress. I'll
get back to real estate brokerage in January when at least some of the dust of the political world will have settled
The comments we heard and received - and presented here - paint a very personal picture of the fourth quarter
2010 market uncertainties and hopes from those who are actively engaged in the market right now.
EARLY STAGE OF THE NEXT UPTURN
Tim Wang, Senior Vice President Research & Investment Strategy, ING Clarion, New York
ING Clarion believes that we are in the early stage of the next upturn cycle. Many people will likely be surprised
by the strength of rebound in commercial real estate fundamentals and pricing. The global search for yield is
already putting rapid downward pressure on the cap rates of institutional quality properties. It is possible that the
total return of NCREIF Property Index for 2010 could exceed 10% for the year.
Despite the slow and uneven progress in the general economy, real estate capital markets have improved
remarkably over the past year. Lenders, especially life insurers and foreign banks, have re-entered the
commercial mortgage market, with increasing competition between lenders leading to lower mortgage rates and
higher loan-to-value ratios for high quality assets.
While risks remain, including ongoing business and consumer deleveraging, rising distress, and weak
fundamentals, investors are beginning to recognize the intrinsic value of real estate assets and adjust their
market outlook accordingly.
EVEN LONG-NEGOTIATED DEALS CAN BE REJECTED OUT OF THE BLUE
Andrew R. Little, Principal, John B. Levy & Co., Richmond, VA
The fourth quarter is a time to push for closings that can increase the bonus pool. This year, we are working hard
to get several deals closed by year end and, in my best guess, 2010 production will surpass last year, which
surpassed 2008. However, the market still does not feel healthy.
Very few small- and mid-sized banks are able to put new money out and the big banks seem able, but entirely
focused on the "bald-headed deal" (no hair). Life companies are also finding their footing and are more willing to
stretch on dollars today versus the last 24 to 30 months. They are aggressively pricing solid deals in good
markets and those life companies that are seeking yield are pushing LTV a little or going to secondary or tertiary
While the market is getting more accustomed to the new levels of leverage and underwriting, the one area of
business that continues to confound us is dealing with special servicers. We see absolutely no motivation to do
anything at the special servicer level. A long negotiated deal with a special servicer (that seems fair to everyone
involved) can meet rejection with no counter offer as soon as it is taken to "the guy down the hall that signs off on
everything." Then you wait for another three months before anything more happens. Meanwhile, the property
deteriorates, tenants go away, the sponsor's capital gets directed to another deal, etc.
SELLER EXPECTATIONS AT INFLATED LEVELS
Jason S. Perlroth, Principal, Grand Run Capital LLC, New York
While I never wish for things to sour, a general uptick may expand seller expectations beyond the already
inflated levels. In general, the pricing spread between sellers and the market is still too wide, so coupled with a
general uptick, the risk/reward profile may further deteriorate.
I'm cautiously optimistic for the fourth quarter. I believe that things will continue to trend positively, but we can
expect a seasonality effect and possible negative implications from government forces.
THE WATCH LIST NEWSLETTER 2
Heading into the final quarter of 2010, my main goal is to close no less than one of the acquisitions currently
under consideration and in negotiation. Outside of this, I'm hoping for deal flow to continue to increase, or at
least certainly not decrease.
EXPECTED LOAN LOSS LEVELS COMING DOWN
Malay Bansal, Managing Director, NewOak Capital LLC, New York
Regulators have tried to avoid forcing fire-sales by giving banks and other institutions more flexibility to extend or
modify loans. Their actions have been criticized by many as extend-and-pretend or delay-and-pray, but reality is
that forced selling would have depressed prices even more. But if prices are bottoming out, giving more time to
borrowers will reduce losses on loans. Expected loss levels have indeed come down for most people in last few
Problems in commercial real estate are not over. The volume of maturing CMBS and other CRE loans ramps up
in 2011 and 2012. There is a value gap that the borrowers will have to deal with once loans mature or are at the
end of extension. Borrowers will have to put in additional capital, find partners, or lose the property. Next year,
we will see more of these instances.
For CMBS investors, deal analysis will become more complicated. Deals with high delinquencies may be left with
better collateral after weaker loans have defaulted than deals where weaker loans are yet to default. Careful
loan-by-loan analysis will be necessary.
Multifamily sector will continue to do relatively better. Hospitality has suffered and is seeing a lot of interest from
investors on good properties. Office sector will feel more pain as leases mature.
EXTRAORDINARILY ACTIVE FOR NON-PERFORMING LOAN SALES
Kenneth A. Cohen, Chairman and CEO, TMAC, San Francisco
We anticipate that the fourth quarter will be extraordinarily active for non-performing loan sales. In some ways,
we see this market at similar to the residential home sales market. Only those sellers who conclude that they
absolutely do not want to continue working the same number of non-performing loans in 2010 (and therefore
accept the pricing levels of buyers who can perform) will be likely to complete transactions. We look to complete
several large portfolio acquisitions as well as one off sales.
A WILLINGNESS TO DO LAND DEALS AGAIN
Richard C. MacDonough Jr., Vice President, The J Street Cos., Washington, DC
The market is better. With some predictability in home pricing having returned in a number of areas, financing
arrangements for development are available. The spigots aren't open full bore, and they shouldn't be.
Nevertheless, a lot of my clients are willing to underwrite, offer and close on deals again. That is particularly the
case with multifamily deals and development sites in areas with solid schools and high barriers to entry. BRAC's
importance cannot be understated in terms of the Maryland suburban markets, in particular.
Our goals in the fourth quarter are to generate 10 solid deal leads per month with each having a seven -figure
minimum value, then getting at least one per month into substantive contract negotiations.
Consequently, our land sales team has begun an energetic expansion into all suburban markets in Maryland and
Northern Virginia. We also are in the process of hiring highly experienced professionals, and we have committed
to doubling our land sales opportunities and downstream relevant leasing engagements.
WAITING ON THE HOUSING MARKET
John L. Morrissey, Senior Commercial Associate, MGR Real Estate, Upland, CA
I think [the fourth quarter] looks better but not good by any means. Homebuilders want to build bu t construction
financing is hard to find at best. Investors have cash on the sidelines but want unreasonably low prices to make
a purchase. SBA owner occupied deals are getting done. I don't see things getting better until we get new
housing going, which is where we get our jobs back. Then everything else will come back.
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THE WATCH LIST NEWSLETTER 4
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EVERY SINGLE DEAL HAS SOMETHING SOMEBODY DOESN'T LIKE
Marty Busekrus, Senior Associate - Investment Sales, NAI Rauch Weaver Norfleet Kurtz & Co., Fort
Goals for the end of the year are just survival in the investment sales brokerage business. Every single deal has
something about it that buyers and their borrowers don't like. The trophy assets are moving again, but on the
deals under $20 million and into the class B/C category there is almost no movement.
From the brokerage standpoint it's a dangerous game because you have to hitch your wagon to the right horse if
you want to win any deals. I've found there's still dumb money out there paying prices that just seem too high for
99% of the buyers I deal with.
What's helping is that at least transaction volume is increasing. It's not great, but there have at least been a few
deals that we can work comps off of.
SLOW BUT VERY MEDIOCRE IMPROVEMENT IN MULTIFAMILY
Neil K. Sethi, Executive Vice President, Landis Properties, Worthington, OH
We are just starting to see some recovery these past few months with our [multifamily] occupancies, etc. So
hopefully we will be able to get some traction on increasing our revenues to bring our budgets into balance. It is
still a tough environment. As of now the fourth quarter is looking pretty decent at our B-Class properties in more
favorable areas, but our B-Class property in a less favorable area continues to struggle.
TIMING, TIMING, TIMING
Adelaide Polsinelli, Associate Vice President Investments, Marcus & Millichap, New York
They used to say that the three main rules of investing in real estate were: location location location. Today it's
more like: timing timing timing. You can buy the best location but if you bought it at the wrong time, you can be
left with a mess - just ask the big name game players of the past three years.
I have been working harder than I can remember in my entire 26 years in this business. I am happy to say that I
am reaping the rewards and closing many of the deals I have been working on. I would be satisfied if all the
deals I have in contract close with minimal problems. I currently have over $100 million in expected closings this
Any additional game-changing regulations, or unexpected tragedies, could upset the market and cause lenders,
and investors to re-evaluate. Market conditions have forced me to be more disciplined and patient.
FOCUS ON WHAT IS SELLING
Joel Owens, Broker, All World Realty, Canton, GA
This year has been great for the Atlanta, GA, investor market. Our main emphasis has been on distress and
income producing properties. Land is not moving unless it is selling for a liquidation value. Many feel apartments
will recover first and that is where most purchase activity is happening. Retail in our markets has a long way to
go to recover.
Investors are active in the market and buying up deals where before the bid-ask gap was too broad.
I have met my goals and 2011 will be the best yet. You have to focus on what is selling in the market and go
over those properties for listings or purchases with your buyers.
THE ROBIN HOOD THREAT
Steve Tutt, Commercial Realtor, KW Commercial, Fremont, CA
Market activity for the rest of the year rests largely on the outcome of the election,
The confidence of the investors I am working with and the direction they take depends in great part on the
election and the creation of sustainable recovery. We won't see sustainable recovery until unemployment
numbers show substantial change. We won't see this until economic policy changes direction and the Robin
Hood threat is eliminated.
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I am exceeding my goals for the year, but then anything is better than nothing. I have learned that a market
always exists and one's success in the market of the moment depends upon one's ability to adapt and to make
one's clientele aware of current market conditions and opportunities, as well as the short- and long-term
I started the year looking for long term opportunities for my clients. During the second and especially third
quarters, some focus has been transferred to short-term opportunities. Going into the third quarter I have
abandoned, at least temporarily, short-term objectives, waiting on the outcome of the election to dictate direction.
POSITIONING FOR 2011
Charles Swope, Broker of Record & Chairman, Swope Lees Commercial Real Estate, Westchester, PA
We have a good pipeline going into the fourth quarter - some of that activity will translate into deals in the first
quarter of 2011. Our goals for end of the year are to position for 2011.
TO PARAPHRASE ROCKEFELLER…
Alex J. Beachum, Income Property Organization, Bloomfield Hills, MI
Like almost everybody else, our firm has been forced to continually adapt and refine our business model since
the downturn really solidified after Lehman tanked in the fourth quarter of 2008. It has been a constant process
of assessing and reassessing trends in the disposition of distressed assets, and learning to identify the various
protocols and strategies lenders-from portfolio lenders, to CMBS special servicers, to GSE's- will utilize when
attempting to resolve a default.
To paraphrase Rockefeller, "family fortunes are made in depressions", and implicit in that statement is the
acknowledgement that any significant downturn affords savvy investors and businesses ample opportunity to
capitalize. Which is precisely what our firm has aspired to do and the results have become more encouraging as
each quarter passes.
FINANCING FOR DEALS LOOSENING
David Schoenemann, Broker, CRES Inc., Austin, TX
I think the year will end up somewhat gray, not dark or bright light, but gray. I say this because I think the lenders
here in my trade area have started to loosen up and are at least talking about and structuring deals that make
sense. This is a change from the first quarter were they weren't even talking.
I have three deals that were scheduled to close in the third quarter, they required financing to move forward. I
have one deal closed and the other deals real close and will close in the fourth quarter. They have been a result
of the loosening of financing for commercial deals. All of the financing has been done with local banks that know
the landscape here in Austin, Texas.
SOME PROMISING SIGNS IN CENTRAL FLORIDA
Nicholas E. Ledvora, Managing Director, Equity Investment Services, Orlando, FL
2010 has been a rollercoaster for commercial real estate in general. Our leasing and management team has
grown. There has been a need to find aggressive brokers to fill holes and stabilize assets. Rents in the Central
Florida market have fallen anywhere from 20-40% based on class of asset and specific market. It looks like
vacancy has stabilized at plus or minus 12% based on our research.
Our fourth quarter looks very strong. We have a dedicated real property tax appeal team that filed approximately
500 appeals across Florida and sales are finally picking up. Banks are pretty close to "marking to market" and
deal flow looks promising.
We expect to close 25 to 30 leases in the fourth quarter. Based on our activity reviews and past performance this
looks good. Landlords are also realizing that they need tenants and income to "float" debt and cash flow. They
are realizing that this recession is going to be a longer dip than originally expected.
LEASING RETURNING; ACQUISITIONS TO RETURN 2011-'14
Aasif M. Bade, President, Ambrose Property Group, Indianapolis, IN
The fourth quarter of 2010 will see increased sale activity prompted by tax change worries and a tiny easing of
credit. Banks have clearly increased their interest in dumping REO assets and we only expect that to become
more prevalent during the fourth quarter.
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Leasing activity seems at the strongest of the year, and most of this activity will result in completed first and
second quarter 2011 deals.
We've become more focused on 2011-2014 acquisitions vs. 2010 acquisitions. The market remains unstable,
assets are priced too high, and for trophy deals, there is 2003-2005 "stupid money" circling. Foreign investors
are troubled by the substantial bad news that poured out during the early part of third quarter 2010, and seem
much less sensitive to the good news that has been hearty during the last 30 days.
MORE ASSETS COMING TO MARKET IN DENVER
Richard Egitto, Senior Managing Director, Crimson Services LLC, Littleton, CO
Leasing activity has been strong this year compared to last year (not much to compare it to I realize) but
nonetheless it has been consistent throughout the year in Class A office space here in Denver.
Clearly from an investment sales point of view, the market is seeing more assets come to market as we move to
the fourth quarter and financing is easing for better quality, better located product (it is still not readily available,
but it is easing). Early this year it seemed the only assets that were trading were core properties in core (Top 5)
U.S. office markets and a foreclosure or two here and there.
As we moved into the second and third quarters it has become clear that the pent up money on the sidelines is
now looking at a wider range of assets and for lower returns, and the banks are now starting to proactively
foreclose on assets -- thus I believe we will see greater deal flow as we move into 2011.
GREATER FOOL THEORY BACK IN PLAY?
Jim Gulley, Principal, James Gulley Ltd., Baltimore, MD
The one trend that seems to be coming back is the "value-add" play. A bellwether here in Baltimore will be the
Loch Raven Village deal. Foreclosed upon a month ago by The Principal Financial Group, this 500-unit plus,
Class C (60 years old), asset traded in 2006 for $32 million plus. Principal bought it at auction for $18.6 million. I
produced one of three offers in the $18.6 million to $20 million range, which Principal rejected. It is now being
marketed as a "value-add" play. What's interesting is that the buyer in 2006 bought it as a value-add deal and
was unable to create any value. So whether the Greater Fool theory is back in play remains to be seen.
TENANTS KICKING THE TIRES IN ATLANTA
Leigh C. Bower, Vice President, NAI Brannen Goddard, Atlanta
The last quarter of the year may pick up slightly because companies with leases expiring in early 2011 will be
focused on making their decisions before year end so they can adequately budget for next year. Oftentimes
these tenants will be "kicking the tires" to compare their current landlords' offer on a renewal against a relocation.
And then there are those tenants wanting to "upgrade their image" via taking advantage of the "tenants' market"
and move to a nicer building.
The entire 2010 year has been an extremely slow one. My goals were set low for this year to adjust to the low
demand and struggling economy.
In landlord representation, market conditions have indeed prompted changes or adjustments of objectives
throughout the year and will be on-going based on the numbers of owners of commercial real estate with assets
in distress. With few exceptions, owners of real estate are in dire need of complete focus on their assets in order
to meet debt obligations, stabilize their assets, adequately compete, retain tenants or otherwise raise occupancy
levels to generate rental revenue.
CONTINUED DOWNWARD PRESSURE
Fred Harllee, Review Appraiser for Special Servicer, Ponte Vedra, FL
For the fourth quarter I see continued downward price pressure in any properties other than Class As. Class C
and D apartments continued on a downward trend with the Midwestern states being hit hard by the troubles in
the auto sector. There are buyers now entering the market aggressively wanting high equity dividend rates and
loans becoming more available at historic high DCRs.
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GROWTH IS ELUSIVE
Blanche Horst, Jones Lang LaSalle Americas Inc., GSA National Broker Contract, Washington, DC
There seems to be a run of large government deals that is sustaining a decent leasing market in downtown
Washington, DC and other metro areas. However, the deficit and runaway spending ultimately will trigger re-
evaluation and belt-tightening.
Market conditions prompted conservative 2010 targets this time last year. Targets have been raised modestly but
remain achievable. While the market has been resilient in DC despite national trend, recovery and growth are
elusive. Cautious optimism will continue for at least three to five years. Bailouts and stimulus spending are a
hindrance to meaningful vibrancy, but opportunities exist.
REALITY CHECK IN EFFECT
Rachel K Maman, Consulting Broker, Hera Development Corp., Brighton, MA
Things look better than this time last year overall. The reality check is officially in effect.
Market conditions have changed our perspective. Once reality set in (global devaluation) we exercised more
caution than 12 months ago. We understand this is a high-risk, high-reward environment that requires enormous
restraint, conservatism, and due diligence to prevail.
It is a counter intuitive environment, like short trading. You want to get in there and day trade like there is no
tomorrow. Instead you rein it in, watch what the big boys are doing, do some shadow trading and read everything
from the Wall Street Journal to the Orlando Business Journal to the Ladies Home Journal :)
Widening the Field of Play in the Southeast
Mac McCall, Senior Director, Franklin Street Real Estate Services, Atlanta
The fourth quarter and into 2011 will continue to present challenges and we see a tremendous growth
opportunity because property owners want to work with brokers who will partner with them and help them tackle
issues with creative solutions.
Our objective is to remain extremely active and continue to meet with new clients who own assets across the
Southeast. We have been in an expansion mode in 2010 and have opened offices in Atlanta, Jacksonville and
Fort Lauderdale with experts in investment sales, leasing, management, finance and insurance who are working
together to help clients maximize their investment returns.
ENORMOUS AMOUNTS OF CASH – AND HESITANCY TO SPEND
Paul Katz, Principal, Nexxus Advisors LLC, Chicago
As is well known, there are still enormous reserves of cash sitting on the sidelines and still hesitancy to invest as
many buyers are not sure "the time is right." We have seen no widespread urgency to invest now, as many feel
that prices may continue to drop or, worst case level out, as loans come due at an increasing rate and lenders try
to resolve their REO and troubled loans-so no urgency to invest now.
On the other hand, idle cash is earning next to nothing and we believe we'll see those opportunistic investors
who are not concerned about timing the absolute market bottom and have substantial cash, continue to buy.
Unfortunately, there are certainly not enough of them to lift the markets nationally, but we are seeing more
transactions completed than last year.
UNDERLYING FUNDAMENTALS NOT ENCOURAGING IN CALIFORNIA
Joseph Gabbaian, Senior Vice President, Grubb & Ellis Co., Los Angeles
I believe that after a bit of tightening at the beginning of the year (which could have been caused by the
government stimulus package), the market has slowed down through the third quarter, with the slowdown
continuing through the end of the year.
I further believe that until and unless the local economy starts creating jobs in substantial numbers and on a
sustained basis, the underlying fundamentals will not improve in any appreciable manner.
THE WATCH LIST NEWSLETTER 9
Another point that usually gets overlooked is the "shadow space" that exists in the market (surplus space that for
some internal reason is not being marketed for sublease). By some accounts, the size of this category of space
could be as large as the sublease space. Therefore, even when the economy starts creating jobs thereby
creating demand for space, this shadow space will get absorbed first before the market will get to absorb the
available sublease and direct spaces, thereby postponing the time landlords may realistically expect to be able to
The goals are keeping the lease deal flow going with any eye towards owner/user sales if possible.
FEAR HAS TAKEN OVER STUDENT HOUSING SECTOR
Chuck Paxton, Carolina Homes & Land Realty, Harrisburg, NC
For me, market conditions appear to have changed. I am in a niche market of student housing development. The
first part of the year my business was booming. Today it appears fear has taken over this industry. Developers,
those that are left, look in the fourth quarter and buy in the first quarter of the new year. The deals must be
superior to even get them to take a second look.
Everybody is looking for distressed properties, however, these possible buyers are not being realistic. Today
possible sellers are holding out waiting for a turnaround that may never happen. Buyers are waiting for the next
price drop that may never occur. That leaves the real estate broker looking but never able to seal the deal.
Determining a good deal has never been harder, due to this attitude.
MONEY RESTLESS, BUT NOT RECKLESS
Jag Grewal, Commercial Realtor, Ian Black Real Estate, Sarasota, FL
In general, our outlook for the remainder of the year is one of caution. It seems like the buyers that we have are
holding off from making a decision until after the election. One of the main indicators of this trend, to me, is that
Walgreens and other blue chip NNN assets have been sold off, to the point that cap rates on that asset class
have been trending to almost below 7. That would indicate investors believe that we are going to be in a holding
pattern for some time and they better find a spot top park the cash than a CD. The money on the sidelines
seems to be restless but not reckless!
I can’t tell you how many emails I have received from brokers with buyers looking for WAG’s or any decent NNN
investments. I can’t seem to find a WAG for around 7.2 cap to save my life!
Nicholas L. Miner, Vice President – Investments, Commercial Properties Inc., Scottsdale, AZ
My goals are to finish the year strong. I had the opportunity of closing 2 sale deals at the end of the 3rd quarter
and I am currently working on a couple more that would try to close by year end. The biggest hurdle is still
financing. Cash is king, but cash is also very patient.
I believe that more transactions are going to occur in the second half of 2010 than all of 2009 and first half of
2010. I am starting to see larger transaction trading at very affordable prices. Recently, a larger grocery-
anchored center that I had in escrow two different times with the last time being in escrow at $75/SF just closed
to with the owner of the center on the adjacent corner purchasing it for cash at $48/SF.
Blockbuster Files Chapter 11; Immediately Closes 145 Stores
Blockbuster Inc., a Dallas-based global provider of rental and retail movie and game entertainment through
3,306 stores in the U.S., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern
District of New York. And store closings have already started.
"After a careful and thorough analysis, we determined that [bankruptcy reorganization] provides the optimal path
for recapitalizing our balance sheet and positioning Blockbuster for the future as we continue to transform our
business model to meet the evolving preferences of our customers," said Jim Keyes, chairman and CEO of
Blockbuster. "The recapitalized Blockbuster will move forward better able to leverage its strong strategic
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Under the terms of the proposed plan of reorganization, the company's 11-3/4% senior secured notes will get to
exchange their holdings for the equity of a reorganized Blockbuster. The only debt expected to remain on the
company's balance sheet upon its emergence from Chapter 11 would be the amounts drawn under Blockbuster's
$125 million DIP financing, which will convert to an exit loan facility upon consummation of the plan, and a new
exit revolving credit facility of up to $50 million. Under the proposed plan, there would be no recovery by the
holders of the company's outstanding subordinated debt, preferred stock or common stock.
As part of the recapitalization process, Blockbuster said it would evaluate its U.S. store portfolio with a view
towards enhancing the overall profitability of its store operations.
As of Aug. 29, Blockbuster operated 2,924 of its U.S. stores; the rest were operated by franchisees.
Prior to filing Chapter 11, Blockbuster closed 145 stores and as part of its filing, the company is looking to cancel
the unexpired leases on those stores. By rejecting the leases, Blockbuster estimates that it will be able to save
$19 million in rent and other related obligations over the remaining term of the leases.
BLOCKBUSTER STORE LEASE CANCELLATIONS
Store Address Lessor Exp. Date Store Address Lessor Exp. Date
9227 E Lincoln
8511 126th St Kew 126-01 Hillside Ave. $12,956; Ave #700 Lone Lincoln & Yosemite $7,430;
Gardens, NY Assoc. 12/31/2011 Tree, CO Co. 1/31/2011
1036 2nd Street ABGS School $9,416; 7161 S 76th St Company,L.P. & $11,196;
Pike Richboro, PA House Associates 10/31/2010 Franklin, WI Lenette 11/30/2010
9110 S Stony Amalgamated Bank
Island Rd Chicago, of Chicago as $9,456; 1595 International Local Shops at $13,748;
IL Trustee 7/31/2011 Blvd Norfolk, VA Super K Norfolf, VA 11/30/2011
#100 San Antonio, AmREIT Olmos $10,703; 6170 Grand Ave $5,001;
TX Creek 1/31/2012 Ste 131 Gurnee, IL Mall at Gurnee Mills 1/31/2011
445 Putnam Pike $7,787; 6273 Wilson Grove Margate Capital $5,720;
Greenville, RI Apple Valley Mall 6/30/2012 Rd Charlotte, NC Holdings 3/31/2011
3333 Arapahoe Rd Arapahoe Ridge $7,676; 581 Roosevelt Rd $14,000;
Erie, CO Retail Center 3/31/2011 Glen Ellyn, IL Market Plaza 450 12/31/2011
1401 Pulaski Hwy
314 Pond St $8,850; Ste F Edgewood, Mars Woodbridge $10,444;
Ashland, MA Ashland Pond 3/31/2012 MD Center Inc. 9/30/2010
200 Oregon Ave Axelrod-Giannascoli $7,623; 754 Grapevine $11,214;
Philadelphia, PA Realty Group 12/31/2010 Highway Hurst, TX Mayfair Station 3/31/2012
4111 Durand Ave $4,989; 8515 NW 186th St Miami Gardens $11,011;
Racine, WI Badger Plaza 10/31/2010 Hialeah, FL Associates 6/30/2011
630 W Ventura St Balden Towne $6,009; 312 Mystic Ave Mystic Property $11,952;
Fillmore, CA Plaza 9/30/2011 Medford, MA Associates 11/30/2011
7451 N Beach St
#140 Fort Worth, $6,284; 1060 State Route $14,238;
TX Basswood Crossing 7/31/2011 35 Middletown, NJ New Monmouth/35 3/31/2011
2290 E College
109 Heritage Drive $10,095; Ave State College, $3,364;
Newberry, SC Bauer Development 4/30/2013 PA Nittany Commons 10/31/2010
103 N Baltimore
169 Pine Hollow $10,149; Pike Springfield, North Baltimore $13,004;
Rd Oyster Bay, NY Bay Auto Mall Corp. 10/31/2010 PA Realty Associates 2/29/2012
4351 Washington Beachrose Evans $8,694; 1802 N Jackson St $4,360;
Rd Evans, GA and Plaza Evans 10/31/2010 Tullahoma, TN Northgate LLC 3/31/2011
2410 N Federal
Hwy Lighthouse Beacon Light $9,089; 33523 8 Mile Rd Northridge $10,583;
Point, FL Partners 6/30/2012 Livonia, MI Commons 2/28/2011
35 Beck Lane Ste $10,400; 266 E Main St $4,568;
C Lafayette, IN Beck BBV Seven 3/31/2014 Clinton, CT NPNC 3/31/2011
THE WATCH LIST NEWSLETTER 11
Store Address Lessor Exp. Date Store Address Lessor Exp. Date
6600 Old Winter Oakhill Village
3812 E Belknap St $10,950; Garden Rd Associates Limited $8,500;
Fort Worth, TX Belknap-Beach, 6/30/2012 Orlando, FL Partnership 7/31/2011
750 Young St $8,987; Way Indianapolis, $6,694;
Tonawanda, NY BG GMT III 9/30/2010 IN Pendleton/ Parkside 10/31/2010
1415 Opelika Rd Blockbuster $8,027; 217 W Lancaster $16,100;
Auburn, AL Investors 9/30/2012 Ave Ardmore, PA Pennsville 6/30/2011
15437 W National 16033 Tampa
Ave New Berlin, $9,113; Palms Blvd PERA City Plaza $11,082;
WI Bradley Operating 1/31/2012 Tampa, FL Tampa 3/31/2011
5079 Broadway BRO-PEN $7,699; Rd Ste B3 Lake $21,390;
Ste 100 Depew, NY Associates 9/30/2015 Forest, CA Perricone, Sam 1/31/2011
870 W Williams $17,269; Pkwy Ste B Reno, PK III Caughlin $10,343;
Ave Fallon, NV C & M Sallon 12/31/2011 NV Ranch 4/30/2012
2003 N Atlantic 2429 N Atlantic
Ave #A Cocoa C.B. Group Of $4,854; Ave #42 Daytona $11,333;
Beach, FL Brevard 12/31/2010 Beach, FL PMAT Bellair 5/31/2011
31834 N Castaic $6,887; 19767 Rinaldi St $13,817;
Rd Castaic, CA Castaic Village 2/28/2011 Northridge, CA PRTC 6/30/2011
1074 Kings 4017 W
Highway New $10,485; Commercial Blvd Ramco Gershenson $6,007;
Bedford, MA Cedar-Kings 7/31/2011 Tamarac, FL Properties 12/31/2010
2300 Center Point
Pkwy Center $7,653; 4054 E 22nd St $5,124;
Point, AL Center Point LP 1/31/2014 Tucson, AZ Randolph Plaza II 8/31/2013
584 Centerville Rd Centerville $6,628; 1501 London Blvd RCC Olde Towne $6,855;
Lancaster, PA Development Co. 10/31/2011 Portsmouth, VA Marketplace 8/31/2011
10954 N Pt
Washington Rd Centro Bradley SPE $11,053; 7150 Leetsdale Dr $11,275;
Mequon, WI 1 1/30/2012 Denver, CO Regency Centers 4/30/2012
4153 State Route Cleves Land $9,217; Bridge Rd #1000 $14,389;
128 Cleves, OH Holdings 11/30/2012 Johns Creek, GA Regency Centers 11/30/2011
4595 Broadmoor CORE Realty 7111 E Tanque Reseda Colonia
Ave #170 Holdings $2,359; Verde Rd Tucson, Lincoln Colonia, $15,605;
Kentwood, MI Management 8/31/2011 AZ Arneill 1/31/2011
1639 P Street NW $8,188; 2352 Delaware and David H. $8,924;
Washington, DC CVS of DC and VA 11/30/2010 Ave Buffalo, NY Baldauf, 1/31/2012
Booth Blvd Dam Neck $9,483; 1358 Poplar Street $6,496;
Virginia Beach, VA Properties 6/30/2012 Pittsburgh, PA S Square 12/31/2011
3836 Union 2115 E
Deposit Rd Dauphin Plaza $9,965; Hillsborough Ave S-B Properties No. $9,723;
Harrisburg, PA Associates 8/31/2012 Tampa, FL 7 12/31/2011
2222 Francisco Dr 1811 S Crain
Ste 240 El Dorado $5,573; Highway Glen Southgate $0;
Hills, CA DC Management 10/31/2010 Burnie, MD Marketplace 3/31/2014
1095 Kennedy Rd DDR Southeast $8,708; 919 E Fort Ave Southside $8,186;
Windsor, CT Windsor 12/31/2010 Baltimore, MD Marketplace 10/31/2010
629 Highway 28
Bypass Ste H1 DDRTC Anderson $4,963; 909 Randolph St Southstar Holdings- $3,564;
Anderson, SC Central 9/30/2010 Thomasville, NC Thomasville 1/31/2012
THE WATCH LIST NEWSLETTER 12
Store Address Lessor Exp. Date Store Address Lessor Exp. Date
35125 US Highway
21 Jones Rd Ste 3 Demoulas Super $5,676; 19 Palm Harbor, $8,920;
Milford, NH Markets 10/31/2010 FL Springhill Partners 2/28/2011
25 Storey Ave Demoulas Super $7,682; 1340 Pennsylvania Starrett City $15,296;
Newburyport, MA Markets (DSM) 2/28/2011 Ave Brooklyn, NY Associates 7/31/2011
3035 W New Stephen R.
Haven Ave West DMB-Newey Joint $12,333; 1224 N Main St Lewinstein d/b/a $8,316;
Melbourne, FL Venture 1/31/2012 Providence, RI North Main Realty 12/4/2012
5221 Mission Oaks Donahue Schriber $8,433; 22330 Sterling Sterling Plaza $11,286;
Blvd Camarillo, CA Realty Group 12/31/2010 Blvd Sterling, VA Shopping Center 11/30/2011
812 E Pittsburgh East PGH Street $6,183; 8917 N Indian Trail $8,870;
St Greensburg, PA Development Co. 12/31/2010 Rd Spokane, WA Sundance Plaza 1/31/2013
4279 S Highway
27, Suite 1, Eden Kings Ridge $13,271; 3934 N Druid Hills $7,170;
Clermont, FL Village 10/31/2012 Rd Decatur, GA T. C. Holmes & Son 10/31/2011
6320 US 287 Hwy Tabani Kilgore and
184 W 231st St $13,548; Ste 112 Arlington, Tabani Apple $10,853;
Bronx, NY Elini Properties 11/30/2010 TX Woodhaven 10/31/2013
906 Erskine Plaza Erskine Plaza $10,098; Turnpike $8,232;
South Bend, IN Associates 9/30/2010 Oakridge, TN Tenneva Properties 10/23/2011
760 Academy Dr
Ste 110 Bessemer, Forest View $10,341; 625 Montana The Cherouge $31,298;
AL Apartments 12/31/2012 Santa Monica, CA Corporation 10/31/2012
1640 Schlosser St $14,928; 5123 Moffett Rd The Commerce $5,324;
Fort Lee, NJ Fort Lee Plaza 11/30/2012 Mobile, AL Building 5/31/2011
6869 Pearl Rd
Middleburg $8,514; 164 Summer St The Stop & Shop $9,958;
Heights, OH Galileo Southland 3/31/2012 Kingston, MA Supermarket 4/30/2011
365 Hamilton St Geneva Shopping $4,160; Blvd New Britain, The Stop & Shop $10,924;
Geneva, NY Center 9/30/2010 CT Supermarket 11/30/2010
15250 N. Oracle Golder Ranch $10,046; 151 VFW Pkwy The Stop & Shop $11,944;
Road Tucson, AZ Retail Center 10/31/2011 Revere, MA Supermarket 7/31/2011
Pike Rockledge, Good Rock Realty $6,730; 4536 Buena Vista Thompson Place $7,515;
PA Partners 10/31/2010 Rd Columbus, GA Associates 12/31/2012
1023 First Ave Greenwich $19,167; 9648 Transit Rd $9,636;
New York, NY Associates 4/29/2012 Amherst, NY Trancom 12/31/2010
2929 K St Ste 100 GREIT-Sutter $20,616; 5200 Route 42 Ste Turnersville $10,519;
Sacramento, CA Square 2/29/2012 15 Turnersville, NJ Partners 1/31/2012
738 Islington St
Ste G Portsmouth, $7,050; 476 Union Blvd $12,656;
NH Griffin Family Corp. 9/30/2010 West Islip, NY Union Blvd Realty 12/31/2011
6001 W Parmer $12,575; 7050 N Shiloh Rd US Regency Retail $9,441;
Lane Austin, TX HEB Grocery Co. 9/30/2012 Garland, TX I 10/31/2012
951 Male Drive $7,462; Blvd Ste F $18,349;
Wind Gap, PA Henry's Joy 11/30/2010 Alexandria, VA USRP I 9/30/2010
3 Traders Way Highlander Plaza $11,947; 2395 York Rd (Rte $8,860;
Salem, MA Realty Trust 9/30/2012 263) Jamison, PA USRP II 11/30/2011
318 Village Center
2320 Hanover Pike $7,172; Dr Logan $12,347;
Hampstead, MD HM Mall Associates 11/30/2011 Township, NJ Village Block 9/30/2010
1309 NW 23rd Ave $7,013; 8416 N Armenia Waters-Armenia $9,399;
Portland, OR HMP 4/30/2011 Ave Tampa, FL Plaza 12/31/2011
THE WATCH LIST NEWSLETTER 13
Store Address Lessor Exp. Date Store Address Lessor Exp. Date
7453 Watt Ave
8970 Knott Ave Imedra 8888 Family $11,624; #111 North Watt North $13,525;
Buena Park, CA Limited Partners 1/31/2011 Highlands, CA Highlands 2/28/2011
Washington St Indy Management $5,361; 5839 Weber Rd Weber Shopping $12,078;
Indianapolis, IN Group 9/30/2010 Corpus Christi, TX Center 4/12/2012
1279 Rickert Dr Inland Hartford $12,924; 13085 W McDowell $8,907;
Naperville, IL Plaza 2/28/2014 Rd Avondale, AZ Weingarten Nostat 8/31/2013
4100 S Lake Inland Western
Forest Dr #330 McKinney Lake $9,500; 3434 W Greenway $9,592;
McKinney, TX Forest 10/31/2011 Rd Phoenix, AZ Weingarten Nostat 1/31/2011
115 Fairview Rd 8156 S Tryon St
Ste 100 IRT Property $10,347; Ste A Charlotte, Weingarten Realty $10,722;
Ellenwood, GA Company 9/30/2011 NC Investors 11/30/2011
3975 Alton Pkwy Irvine Retail $27,535; 5192 Avenue H Weingarten Realty $8,162;
Irvine, CA Properties Co. 11/30/2010 Rosenberg, TX Investors 11/30/2010
340 Rhode Island $10,289; 174 Littleton Rd Westford Valley $12,101;
Ave Fall River, MA Island Associates 12/31/2011 Westford, MA Marketplace 8/31/2011
Ranch Rd Rocklin, $14,340; 15101 Lorain Rd $5,232;
CA JJD-HOV Rocklin 8/31/2012 Cleveland, OH Wm. E. Asplin 9/30/2010
314 S Henderson 10016 W Oakland
Rd King of K-1 Henderson $10,014; Park Blvd Sunrise, Wood Florida $9,358;
Prussia, PA Square Associates 8/31/2011 FL Investments 9/30/2010
104 Main St $15,825; Centre Dr $8,650;
Gaithersburg, MD Kentlands Retail 8/31/2012 Worthington, OH Worthington Park 6/30/2011
3999 Austell Rd
4650 W Diversey Klairmont $11,984; Ste 901 Austell, WRI Brookwood $13,353;
Ave Chicago, IL Enterprises 1/31/2011 GA Square 11/30/2011
2055 NE Burnside $9,250; Heights Dr Cary, $7,794;
Rd Gresham, OR KRC Oregon Trail 3/31/2012 NC WRI/Raleigh 10/31/2010
22621 Lakeforest 7243 N Federal
Drive D1 Lake Forest Town $18,881; Blvd #1200 WRI-Miller $9,741;
Lakeforest, CA Center Associates 10/31/2010 Westminster, CO Westminster I 2/28/2011
1208 Garth Brooks $7,650; 1290 E Highway $9,508;
Blvd Yukon, OK Larry Rhodes 9/30/2012 193 Layton, UT Wyndom Square 6/30/2012
340 Pompton Ave Leonard Diener $15,580;
Verona, NJ Investment Co. 1/31/2012
Rite Aid Looking for Savings Among its Brick & Mortar
Faced with mounting losses, slumping sales and declining stock price, Rite Aid Corp. continues to cut its brick
and mortar expenses and revamp its store line up. The drug store company discussed some of its initiatives at its
quarterly earnings conference call this past week.
For starters, the company with 4,700 stores across the country said it was continuing to rationalize its distribution
center network. That included the announcement that it was closing its distribution center at 5865 Success Drive
in Rome, NY. The leased and owned facilities will be closing by the end of the year. 388 people work at the main
building and satellite facilities there.
The size, age, condition and infrastructure of the 38-year-old Rome facility were a key factor in its decision. Rite
Aid leases two of the buildings it occupies there and owns the third. The company estimated that the owned
facility "is probably worth $4 million to $5 million" and has put it up for sale.
THE WATCH LIST NEWSLETTER 14
The company added that is continuing to evaluate its distribution network for possible additional savings. Last
year, Rite Aid closed distribution centers near Atlanta, GA, and Bohemia, NY.
Rite Aid is also evaluating its options for its under-performing stores. In this case, though, the company is "kind
of marching down a couple of different roads," John Standley, president and CEO of Rite Aid said.
Closures are one road. The company has "probably a couple of 100 stores" that are not profitable and that it has
decided to close about 40 of them this year. That would bring total store closures to about 80 for the year.
However, Rite Aid is also looking at revamping some of its lower volume stores to "value stores." These stores
offer about 9,000 fewer products than its traditional drug stores. The products are also offered at lower prices.
Standley said that these stores are showing strong front-end sales growth.
"Our goal is to improve the productivity in these stores by combining the new merchandizing program with a
modified distribution model, and if successful, evaluate whether the model can be expanded to other low-
volumes stores in the chain," he said.
A third initiative that Rite Aid is working on is testing combo stores. The first such arrangement is a 10 -store deal
with Sav-A-Lot in Greenville, SC. There it has a licensing agreement with Sav-A-Lot to add its limited assortment
food-store concept to the front of those 10 existing Ride Aid stores. The front-end will carry about 1,300 Sav-A-
Lot products, including prepackaged meat, produce and dairy.
"We chose these stores in Greenville, because they have solid pharmacy business, but we need stronger sales
on the front-end. This new co-branded concept presents a unique opportunity to increase front-end sales in this
market," Standley said.
THE WATCH LIST NEWSLETTER 15
Ashley Stewart Parent Files Chapter 11, Seeks Buyer
Urban Brands Inc., the owner of Ashley Stewart clothing stores in the U.S., sought bankruptcy protection in
Delaware. The New York-based retailer filed for Chapter 11 protection citing debt of $100 million to $500 million
and assets of $10 million to $50 million.
Urban Brands is a leading specialty retailer of apparel for plus sized urban women under the brand name of
Ashley Stewart. As of its Chapter 11 petition date, Urban Brands operated 210 stores in 26 states with
approximately 2,100 employees, the majority of which are minority women. Until 2009, it also operated stores
under the brand name of Marianne.
The Ashley Stewart concept was founded in 1991 and has grown to become a nationally-recognized brand. It
focuses primarily on the underserved urban market, particularly the African American and Hispanic consumer.
According to its bankruptcy court filings, although Urban Brands significantly reduced its net losses from
approximately $44.3 million in 2008 to $28.6 million in 2009, the business has continued to operate at a loss this
year. Additionally, from fiscal year 2008 to fiscal year 2009, net sales decreased from $179.6 million to $174.6
In April 2010, Urban Brands engaged Oppenheimer & Co. Inc. to assist in raising additional financing. During the
course of the marketing effort, Oppenheimer contacted approximately 40 potential investors, but was unable to
reach a definitive agreement with any. Urban Brands then determined that it was in its best to pursue a sale of all
or substantially all of its assets.
This month, Urban Brands entered into a "stalking horse asset purchase agreement" with an affiliate of Gordon
Brothers Group. That deal provides for a going concern sale of substantially all of the Urban Brands' assets for
While it is anticipated that a significant number of the Ashley Stewart's store leases will be assumed and
assigned to the stalking horse bidder at closing, the deal gives the buyer 120 days to assume or reject any
JPMorgan Packages Retail, Office Loans into a New CMBS
J.P. Morgan Chase Commercial Mortgage Securities Corp. is prepared to launch its second new CMBS of the
The primary assets of J.P. Morgan Chase Commercial Mortgage Securities Trust 2010-C2 are 30 loans secured
by 47 commercial properties having an aggregate principal balance of approximately $1.101 billion. The loans
were originated by JP Morgan Chase Bank.
As with most new CMBS deals coming to market, the deal is loaded primarily with retail properties backed by a
major sponsor. Simon Property Group, via joint ventures, is among the sponsors of the largest and fourth-largest
loans, which account for 23% of the pool. other sponsors, include Taubman Realty Group, Farallon Capital,
Institutional Mall Investors and CTC Realty Associates.
Retail properties represent the highest concentration of the pool at 67%. Office properties represent 16.5%. The
retail concentration is composed of large regional malls, power centers, and local shopping centers.
According to Fitch Ratings Service, this portfolio make up reflects weak pool diversity by property type. Retail
has an average likelihood of default in the Fitch U.S. CMBS multiborrower rating model, and office properties
have an average likelihood of default as well. In addition, high concentrations by property type can lead to
increased volatility due to correlations.
The largest loan in the pool is Arizona Mills, a 1.2 million-square-foot mall in Tempe, AZ. The $174.51 million
loan, which is being used to refinance existing debt of $131.8 million, is sponsored by a joint venture between
THE WATCH LIST NEWSLETTER 16
Simon Property Group, Farallon Capital Management and the Taubman Realty Group. The interest rate on the
loan is 5.76% and the loan matures in July 2020.
The property, which was built in 1997, is anchored by J.C. Penney Outlet, Burlington Coat Factory, and Sports
Authority. J.C. Penney Outlet leases 104,697 square feet, expiring in November 2012; Harkins Theaters 93,320
square feet, expiring in November 2012)\; Burlington Coat Factory 80,426 square feet, expiring in November
2012, and Sports Authority 65,013 square feet, expiring in January 2013.
Other major tenants include: Gameworks leasing 3% of net rentable area, expiring in November 2017; Off 5th
Saks Fifth Ave, 3% of NRA, expiring in November 2012; and Marshalls 3% of NRA, expiring in January 2013.
The Master Servicer and Special Servicer will be Midland Loan Services, Inc.
Benihana Chain Goes Up For Sale
Benihana Inc., the Miami-based operator of the nation's largest chain of Japanese theme and sushi restaurants,
hired Jefferies & Company Inc. as its exclusive financial advisor in pursuing a sale of the company.
"In July, as part of our board's commitment to exploring all avenues for maximizing shareholder value, we
announced that we would be conducting a formal review of strategic alternatives including a possible sale of the
company," said Richard Stockinger, president and CEO of Benihana. "At the same time, we remain focused on
our operating strategies for strengthening the company."
THE WATCH LIST NEWSLETTER 17
Benihana operates 97 restaurants nationwide, including 63 Benihana Teppanyaki restaurants, nine Haru sushi
restaurants, and 25 RA Sushi Bar restaurants. In addition, 20 franchised Benihana Teppanyaki restaurants are
operating in the U.S., Latin America and the Caribbean.
More Banks Under the Gun To Raise Money, Be Sold, or Face a Worse Fate
Federal regulators have issued prompt corrective actions against five banks across the country putting them on
the clock to raise money or face closure.
Prompt corrective actions (PCAs) give banks a specified number of days to raise money immediately or enter
into a merger or sale. While it is not stated in the PCA, the underlying understanding is if the bank does not
comply, then federal regulators could close or sale them.
Peoples State Bank in Hamtramck, MI, was deemed to be significantly undercapitalized after failing to submit
acceptable capital restoration plans and was issued a PCA requiring immediate raising of capital or executing a
sale or merger.
As of June 30, 2010, Peoples State Bank reported total assets of $446 million and a year-to-date loss of
$777,000 million. The bank had total distressed commercial real estate assets (including construction and
development, nonresidential and multifamily loans 90-plus days past due or restructured and foreclosed
properties) of $73 million or 16% of assets.
LandMark Bank of Florida in Sarasota, FL, was deemed to have failed to comply with a federally approved
capital restoration plan and was given a 90-day deadline to comply with a PCA.
As of June 30, LandMark Bank of Florida reported total assets of $320 million and a year-to-date loss of
$466,000. The bank had total distressed CRE assets of $20 million or 6% of assets.
Western Commercial Bank in Woodland Hills, CA, was deemed to have inadequate capital levels and be in
deteriorating condition and that management has been unable to return it to a safe and sound condition. The
bank was given 90 days to raise capital, be merged or sold.
As of June 30, Western Commercial Bank reported total assets of $110 million and a year-to-date loss of $3.7
million. The bank had total distressed CRE assets of $11.5 million or 10% of assets.
American Patriot Bank in Greeneville, TN, was deemed to be significantly undercapitalized and was given until
Aug. 31 to submit a capital restoration plan. If it did not meet that deadline, then the PCA requiring a merger or
sale would kick in. It could not be determined whether the bank met the Aug. 31 deadline.
As of June 30, American Patriot Bank reported total assets of $108 million and a year-to-date loss of $1.3 million.
The bank had total distressed CRE assets of $11 million or 10% of assets.
Idaho First Bank in McCall, ID, was deemed to have inadequate capital levels and be in deteriorating condition
and that management has been unable to return it to a safe and sound condition. The bank was given 30 days to
raise capital, be merged or sold.
As of June 30, Idaho First Bank reported total assets of $82 million and a year-to-date loss of $1.5 million. The
bank had total distressed CRE assets of $3.7 million or 5% of assets.
Syringa Bank in Boise Required To Raise Money, Jettison Bad Assets
Syringa Bank in Boise, ID, entered into an agreement with the FDIC and Idaho Department of Finance to
improve its financial strength by raising additional capital and further reducing problem loans.
"The current economic environment has impacted Syringa Bank's level of provisions for non-performing loans
and has resulted in sharp declines in the value of underlying commercial and residential real estate collateral,"
THE WATCH LIST NEWSLETTER 18
said Scott Gibson, president and CEO of Syringa. "As the economy has continued to struggle to recover, Syringa
Bancorp and Syringa Bank have done everything possible to reserve for potential losses by writing off non -
performing loans. While such actions have negatively impacted capital, these actions have been critically
important to Syringa Bank's conservative outlook and establishment of a stronger bank for the future. The
foregoing actions, in conjunction with raising additional capital, will poise Syringa Bank to take advantage of
various opportunities as the economy strengthens and returns."
As of June 30, Syringa Bank reported total assets of $235 million and a year-to-date loss of $1 million. The bank
had total distressed CRE assets of $14.6 million or 6% of assets.
Two More Banks in Florida, Washington Closed and Sold
First Southern Bank in Boca Raton, FL, acquired all of the assets and assumed substantially all of the deposits
of Haven Trust Bank Florida in Ponte Vedra Beach, FL, from the Federal Deposit Insurance Corp. (FDIC). Haven
Trust Bank Florida was closed by the Florida Office of Financial Regulation, which appointed the FDIC as
The deal is First Southern Bank's first acquisition since its parent company raised $400 million earlier this year to
grow the company in Florida and elsewhere through strategic merger and acquisition opportunities.
Haven Trust Bank Florida had $148.6 million in total assets and $133.6 million in total deposits as of June 30,
2010. The bank had two locations – one in Ponte Vedra Beach and one in St. Augustine. It had lost $3.2 million
through the first two quarters of this year. It reported having $41 million in total distressed CRE assets or 28% of
THE WATCH LIST NEWSLETTER 19
The FDIC and First Southern Bank entered into a loss-share transaction on $127.3 million of Haven Trust Bank
Florida's assets. First Southern Bank will share in the losses on the asset pools covered under the loss-share
The FDIC estimated that the cost to its Deposit Insurance Fund (DIF) will be $31.9 million.
Separately, The FDIC entered into a purchase and assumption agreement with Whidbey Island Bank in
Coupeville, WA, to assume all of the deposits of North County Bank in Arlington, WA. The bank was closed by
the Washington Department of Financial Institutions, which appointed the FDIC as receiver.
As of June 30, North County Bank had approximately $288.8 million in total assets and $276.1 million in total
deposits and four branches. It had lost $2.9 million through the first two quarters of this year. It reported having
$48 million in total distressed CRE assets or 17% of assets.
Whidbey Island Bank will pay the FDIC a premium of 2% to assume all of the deposits of North County Bank. In
addition to assuming all of the deposits of the failed bank, Whidbey Island Bank agreed to purchase essentially
all of the assets.
The FDIC and Whidbey Island Bank entered into a loss-share transaction on $221.9 million of North County
Bank's assets. Whidbey Island Bank will share in the losses on the asset pools covered under the loss-share
The FDIC estimated that the cost to its DIF will be $72.8 million.
THE WATCH LIST NEWSLETTER 20
Starwood, Kaufman Jacobs and JPMorgan Reorganize Rubicon US REIT
Starwood Capital Group, Kaufman Jacobs LLC and JPMorgan Chase & Co. successfully completed the
reorganization of Rubicon US REIT Inc., a Chicago-based real-estate investment trust (REIT) consisting mainly
of properties leased to the U.S. General Services Administration (GSA). Rubicon US REIT had been under
Chapter 11 bankruptcy protection since January 2010.
Per terms of the reorganization, approximately $80 million in bonds were exchanged for 100% of the common
stock of Rubicon US REIT and the issuance of new corporate debt of $50 million, which ensures adequate
solvency for Rubicon US REIT. Class A preferred stockholders will retain their equity through the bondholders'
plan. Unsecured creditors will also be paid in full, totaling approximately $1 million.
Affiliates of Starwood Capital., Kaufman Jacobs, and JPMorgan together own 100% of the corporate bonds of
Rubicon US REIT. Kaufman Jacobs is taking over day-to-day management of Rubicon US REIT.
"Through active management of the portfolio and the lease renewal process, we expect to increase the
underlying value and NOI (net operating income) of Rubicon's properties," said Christopher Graham, managing
director of Starwood Capital Group, the Greenwich, CT-based global real-estate investment firm. "We plan a
multi-year, targeted disposition strategy following our value-accretive efforts on behalf of our affiliated funds."
"We are pleased to have saved Rubicon from a forced liquidation and kept the REIT intact, preserving
stakeholder value and allowing us to undertake a variety of value-creating activities," said Jeremy Kaufman,
managing partner of Kaufman Jacobs, a Chicago-based investor, developer and manager of real estate that
specializes in government-tenanted property and complex real-estate transactions. "This is an excellent portfolio
with a rock-solid base of government tenancy. The REIT should enjoy high renewal rates as its core holdings are
build-to-suit facilities leased to the United States government."
Rubicon US REIT's primary holding is the GSA II Portfolio, totaling more than 1.8 million square feet in nine
states. Leases administered by the GSA generate approximately 72% of GSA II's rental income, with state and
municipal leases accounting for the remainder. Tenants include the FBI, U.S. Secret Service, and agencies
within the Department of Homeland Security, all of which have expanded in personnel and mission scope in
Rubicon US REIT also has investments in Overtown Transit Village Phase II, a development project in Miami,
FL, and three joint ventures, aggregating almost 1.5 million additional square feet. The total value of Rubicon US
REIT's assets is estimated at approximately $550 million.
Real Money: Note Purchases & Sales
Mariner Real Estate Management LLC in Leawood, KS, purchased a 40% interest in a portfolio consisting of
$760 million in real estate loans, including 1,062 residential and commercial acquisition and development loans
of which more than 80% are delinquent. The loans come from 20 banks and the backing collateral is in
approximately 24 states. All of the loans were from banks that failed during the past 25 months. MREM paid $52
million (net of working capital) in a limited liability company created by the FDIC to hold all of the loans and REO
assets. The price paid is about 30.93% of the unpaid principal balance. The FDIC is retaining the remaining 60%
equity interest. The FDIC provided the newly formed entity 1:1 leverage, through the issuance of approximately
$105 million in nonrecourse, 0% interest financing and a $25 million advance facility for working capital needs.
MREM funded the money needed for this project though two of its funds, Mariner Real Estate Partners LLC
(MREP) and Mariner Real Estate Partners II LLC (MREP2).
Waterton Residential in Chicago acquired $109.5 million of debt secured by four prime multifamily properties in
North Carolina and California. The acquisitions include mortgages secured by the Exchange at Brier Creek, a
274-unit property in Raleigh, NC; Skyline Terrace Apartments, a 139-unit property in Burlingame, CA;
Waterstone Corona Pointe Apartments, a 628-unit property in Corona, CA; and Copper Canyon Apartments, a
296-unit property in Riverside, CA. So far this year, Waterton has acquired $179.2 million in distressed debt
secured by multifamily assets and expects to acquire another $150 million in debt and/or multifamily properties
THE WATCH LIST NEWSLETTER 21
by the end of 2010. All four
properties were acquired as
part of Waterton Residential
Property Fund X, a $222
multifamily investment fund.
Bank of the
Commonwealth in Norfolk,
VA, sold Monterey I Holdings
commercial and construction
and development loans,
without recourse, for $19.2
million, with no loss to the
bank. On the same day, the
bank purchased a pool of
mortgage home equity loans,
without recourse, for the
estimated fair value of $71.3
million. The pool of loans
purchased has a book value
of $73.3 million. As part of
this loan purchase, Monterey
also paid the bank $2.9
million, representing 4% of
the loan pool, as a non-
refundable reserve for any
future losses on the pool of
KBS Strategic Opportunity
REIT Inc. purchased three
separate non-performing first
mortgage loans on the
Roseville Commerce Center
from Heritage Bank of
Commerce. The first loan
with an outstanding unpaid
principal balance of $8.5
million is secured by three
industrial flex buildings
containing 68,431 rentable square feet and was acquired for $4 million plus closing costs. The second loan with
an outstanding unpaid principal balance of $4.7 million is secured by two industrial flex buildings containing
44,910 rentable square feet and was acquired for $1.7 million plus closing costs. The third loan with an
outstanding unpaid principal balance of $1.5 million is secured by four parcels of partially improved land
encompassing 6 acres and was acquired for $200,000 million plus closing costs. The borrowers under each of
the three loans in the Roseville Commerce Center Mortgage Portfolio are affiliates of Mac Millan Partners Inc.
The collateral securing the loans is at 10556-10612 Industrial Ave. in Roseville, CA. The buildings are
collectively 38% leased. Each of the loans bears interest at 5.5% and matures in September 2011.
KBS Strategic Opportunity REIT also purchased, at a discount, a non-performing first mortgage loan for $2.8
million plus closing costs from Wells Fargo Bank, as trustee for the registered holders of J.P. Morgan Chase
Commercial Mortgage Security Corp. Commercial Mortgage Pass-Through Certificates Series 2001-C1. The
borrower under the Academy Point Atrium I First Mortgage is Peridot Properties I LLC. The property securing the
loan is Academy Point Atrium I, a two-story office building constructed in 1981. The office building contains
92,099 rentable square feet and is part of a two building campus on 7.22 acres at 1250 Academy Park Loop in
THE WATCH LIST NEWSLETTER 22
Colorado Springs, CO. The building has been vacant since December 2009. The maturity date of the Academy
Point Atrium I first mortgage is Nov. 1, 2011 and bears interest at a fixed rate of 7.125% and monthly payments
include interest and principal with principal calculated using an amortization of 30 years.
Winthrop Realty Trust acquired for $250,000 a performing mezzanine loan which had an original principal
balance of $1.5 million. The note is indirectly secured by a 129,660-square-foot warehouse building in Shirley,
NY, net leased to Rockwell Automation. This loan bears interest at 12%, requires monthly payments of interest
and principal in the amount of $15,429.19 and is scheduled to mature on May 1, 2016. The loan is junior in
payment priority to a first mortgage loan with a current principal balance of $17 million, which bears interest at
6.138% per annum and also matures on May 1, 2016.
Winthrop Realty Trust also acquired for $550,000 a non-performing $3.5 million mezzanine loan, which is
indirectly secured by a 180-unit apartment building in Meriden, CT. The loan, which bears interest at 12% per
annum, is currently in default. The loan is junior in payment priority to a first mortgage loan, which is not in
default and which bears interest at 5.83% and has a current principal balance of approximately $23.9 million.
Under Investigation, Amedisys Consolidating Operations
Amedisys Inc., a Baton Rouge, LA-based home health and hospice company, will be closing 13 agencies (nine
home health and four hospice) and consolidating another 26 locations (23 home health and three hospice) into
existing locations. The company currently operates 601 locations in 45 states.
The company also plans to reduce its start-up program, discontinuing the start-up process currently in progress
associated with 28 prospective home health agencies and reducing its planned pipeline. As a result, the
company expects to open five to 10 home health start-ups in 2011, down from the total 40 start-ups expected to
be opened in 2010.
"The tremendous growth Amedisys has experienced over the last few years inevitably led to markets that could
benefit from consolidation," said Michael Snow, COO of Amedisys.
Not mentioned in the explanation of the consolidation is that Amedisys also announced this past week that it
received a civil investigative demand issued by the U.S. Department of Justice pursuant to the federal False
Claims Act. The demand requires the delivery of a wide range of documents and information to the U.S.
Attorney’s Office for the Northern District of Alabama, relating to the company’s clinical and business operations,
including reimbursement and billing claims submitted to Medicare for home health services, and related
compliance activities. The demand generally covers the period from 2003 through the present. The company
said intends to cooperate with the Department of Justice with respect to this investigation.
As a result of its consolidation actions, the company expects to incur non-recurring charges in the range of $6
million to $8 million in the third quarter and approximately $1 million in the fourth quarter of 2010. These charges
include lease terminations of approximately $4 million to $5 million and other charges, including severance
payments, of approximately $3 million to $4 million.
VeriSign Cancels 180,000-SF Lease
VeriSign Inc., the major tenant of Lakeside at the Loudoun Tech the Lakeside complex at 21345-55 Ridgetop
Circle in Dulles, VA, intends to exercise its first option to terminate its lease effective November 2012. VeriSign
occupies 180,476 square feet in the three-building complex owned by Tishman Speyer Office Fund in Sydney,
Australia. Upon termination of its lease at the Lakeside complex, VeriSign will be subject to a termination penalty
of approximately $3 million. VeriSign Inc. had also leased all 221,326 square feet in Sallie Mae's former
headquarters at 12061 Bluemont Way also in Reston. The company, which oversees much of the Internet
domain registration and naming services and a growing business in managed security and authentication, is in
the process of relocating its corporate headquarters from Mountain View, CA, to Reston.
THE WATCH LIST NEWSLETTER 23
Local Closures & Layoffs
Closure or Owned or
Company Address Layoff Leased # Impacted Impact Date
A&P 1060 W. Main St., Branford, CT Closure Leased 156 11/1/2010
820 Washington St., Middletown,
A&P Food Mart CT Closure Leased 77 11/1/2010
A&P Food Mart 90 Halls Road, Old Lyme, CT Closure Leased 88 11/1/2010
A&P Food Mart 179 Stonington Road, Mystic, CT Closure Leased 95 11/1/2010
Albertsons' 2401 Saviers Road, Oxnard, CA Closure Leased 86 10/15/2010
4644 E. Avenue South,
Albertsons' Palmdale, CA Closure Leased 66 10/15/2010
American Bottling Co.
dba Seven-Up Bottling
Co. 425 Chestnut St., Vallejo, CA Layoff Owned 93 10/18/2010
Angeles Welding & 9747 Norwalk Blvd., Santa Fe
Mfg., Inc. Springs, CA Closure Leased 63 10/16/2010
Rehabilitation & Care
Center 1875 Barton Road, Redlands, CA Layoff Unknown 119 10/30/2010
BD Medical 4665 North Ave., Oceanside, CA Closure Leased 35 10/7/2010
Benefit Cosmetics 725 85th Ave., Oakland, CA Closure Leased 52 10/15/2010
Chevrolet/Subaru 1000 Arnele Ave., El Cajon, CA Closure Leased 80 10/31/2010
Company R & D 6000 Thompson Road, East
Facility Syracuse, NY Closure Unknown 48 12/31/2010
10020 Pacific Mesa Blvd., San
Carefusion Resources Diego, CA Layoff Leased 77 10/15/2010
3750 Torrey View Court, San
Carefusion Resources Diego, CA Layoff Owned 67 10/15/2010
9868 Scranton Road, San Diego,
Carefusion Resources CA Layoff Leased 25 10/15/2010
1100 Bird Center Drive, Palm
Carefusion Resources Springs, CA Layoff Leased 16 10/15/2010
1660 Iowa Ave. Suite 100,
Carefusion Resources Riverside, CA Closure Leased 14 10/14/2010
841 Chevron Way & 1450
Chevron Products Co. Marina Way, Richmond, CA Layoff Leased 21 10/26/2010
Coldwell Banker 10450 San Jose Blvd.,
Devonshire Realty Jacksonville, FL unknown Leased 41 9/3/2010
Crothall Services 910 45th St., West Palm Beach,
Group FL unknown Unknown 79 11/10/2010
4350 Executive Drive Suite 325,
Cypress Bioscience San Diego, CA Layoff Leased 123 10/6/2010
DC Entertainment - DC
Comics 1700 Broadway, New York, NY Layoff Leased 80 12/27/2010
DMI Furniture 611 E. 8th St., Huntingburg, IN Closure Owned 62 11/19/2010
Manufacturing Co. 486 Baer Drive, Hudson, WI Closure Owned 63 10/31/2010
2500 Grant Road, Mountain
El Camino Hospital View, CA Layoff Owned 141 10/13/2010
El Camino Hospital 815 Pollard Road, Los Gatos, CA Layoff Owned 40 10/13/2010
Fiskars Brands Inc. 780 Carolina St., Sauk City, WI Closure Leased 65 10/29/2010
GE Healthcare Patient 8200 W. Tower Ave., Milwaukee,
Care Solutions WI Layoff Owned 29 1/1/2011
Grocery Haulers, Inc. 777 Brush Ave., Bronx, NY Closure Leased 61 11/20/2010
Worldwide 3570 W. Florida Ave., Hemet, CA Closure Leased 295 10/6/2010
Automotive 750 S. Fillmore Road,
Components Greencastle, IN Layoff Owned 202 11/10/2010
THE WATCH LIST NEWSLETTER 24
Closure or Owned or
Company Address Layoff Leased # Impacted Impact Date
500 W Orchard Drive,
Icicle Seafoods Bellingham, WA Closure Unknown 71 10/18/2010
10332 W. Silver Spring Drive,
J C Penny Outlet Store Milwaukee, WI Closure Leased 120 12/4/2010
Lifescan Inc. 1000 Gibraltar Drive, Milpitas, CA Layoff Owned 27 10/15/2010
Media Lithographics 6080 & 6032 Triangle Drive, City
Inc. of Commerce, CA Closure Leased 67 10/30/2010
Mission Linen Supply, 550 Florida St., San Francisco,
Plant 500 CA Closure Leased 70 10/29/2010
4837 Watt Ave., North Highlands,
Ocwen Loan Servicing CA Closure Leased 452 10/31/2010
Precision Dynamics 13880 Del Sur St., San
Corp. Fernando, CA Layoff Owned 19 10/22/2010
Ross Network, Inc. 227 E. 45th St., New York, NY Closure Leased 164 10/15/2010
555 The Shops At Mission Viejo,
Saks Fifth Avenue Mission Viejo, CA Closure Leased 62 10/23/2010
Stanadyne Corp. 92 Deerfield Road, Windsor, CT Closure Owned 13 12/10/2010
Systron Donner 2700 Systron Drive, Concord, CA Layoff Owned 22 10/29/2010
1300 Wible Road, Bakersfield,
Target CA Closure Owned 165 10/5/2010
14748 W. Colonial Drive, Winter Partial
The Men's Warehouse Garden, FL Closure Leased 58 11/12/2010
3985 70th Ave. E, Suite B, Fife,
The Men's Wearhouse WA Closure Leased 42 11/12/2010
Valley Fresh Inc. 680 D St., Turlock, CA Closure Owned 101 10/29/2010
455, 487, 675, 501, & 685 E.
Middlefield Road, Mountain View,
Verisign CA Layoff Owned 53 10/11/2010
260 Glenwood Circle, Monterey,
VI CA Layoff Unknown 83 10/19/2010
772 N. Main St., West Hartford,
Waldbaum's CT Closure Leased 195 11/1/2010
Loan Maturities: Mezz Loans Due in October
The following information for these lead listings was provided by Investcap Advisors LLC, an industry leader in providing
surveillance data on loan and commercial real estate performance underlying the CMBS market.
Property Pymt Status; Curr. Maturity CMBS;
Property Name Address Type Mezz. Bal. Date Servicer
The Arbors Of Pleasant 2020 Hinson Loop, MEZZ 2004-C1;
Valley Apartments Little Rock, AR Multifamily Current; $298,490 12/11/2010 Wachovia Bank
Lake Sweetwater Road, Lawrenceville, 90+ Days Delinquent; MEZZ 2005-C3;
Apartments GA Multifamily $1,364,148 10/11/2010 Wachovia Bank
7409 Little River
Turnpike, Annandale, Less Than 30 days MEZZ 2005-C3;
Little River Retail VA Retail Delinquent; $263,545 11/1/2010 Wachovia Bank
Less Than 30 days
2001 Bryan Street, Delinquent; MEZZ 2006-C4;
Bryan Tower Dallas, TX Office $3,247,882 10/11/2010 Wachovia Bank
THE WATCH LIST NEWSLETTER 25
Watch List: Mezz Loans in Special Servicing
The following information for these lead listings was provided by Investcap Advisors LLC, an industry leader in providing
surveillance data on loan and commercial real estate performance underlying the CMBS market.
Property Curr. Mezz.
Property Name Address Type Bal. Comment
4201 Pleasant Lake
Saratoga Springs Village Lane, Duluth,
Apartments GA Multifamily $591,701 Forbearance negotiations are ongoing.
Briarwood 1300 East Fort Lowell Loan is crossed with The Orchard and
Apartments Road, Tucson, AZ Multifamily $500,000 Cottages of Fall Creek.
Harbor Pointe 4101 Nasa Road, El
Apartments Lago, TX Multifamily $576,105 Forbearance negotiations are ongoing.
Landing 400 Timbercreek Transferred to special servicer in February
Apartments Drive, Clute, TX Multifamily $566,114 2010.
6802 East 56th
The Cottages of Street, Indianapolis, Loan is crossed with Briarwood and The
Fall Creek IN Multifamily $800,100 Orchard.
Lakeridge 6155 Plumas Street, Counsel will be proceeding with a
Apartments Reno, NV Multifamily $797,293 foreclosure.
The Orchard 5350 Cider Mill Lane, Loan is crossed with Briarwood and Cottages
Apartments Indianapolis, IN Multifamily $700,000 of Fall Creek.
1101 Grebe Court, Loan transferred to special servicing because
Pheasant Run Martinsburg, WV Multifamily $697,169 borrower sent written notice of inability to pay.
11800 Braesview Legal counsel has been engaged for
Lincoln Green Drive, San Antonio, purposes of making demand and imitating
Apartments TX Multifamily $1,499,802 foreclosure.
THE WATCH LIST NEWSLETTER 26
Property Curr. Mezz.
Property Name Address Type Bal. Comment
Colony Oaks By 18100 Nassau Bay,
The Bay Nassau Bay, TX Multifamily $495,346
REO, as of 7/2/10, the property was 76%
occupied. The property will be managed to
Bear Creek 601 Del Paso Street, stabilization at 80% at which point it will be
Apartments Euless, TX Multifamily $404,041 marketed for sale.
Timmaron 9850 Whitehurst The property was marketed for sale. Offers
Apartments Drive, Dallas, TX Multifamily $385,000 have been received and are being evaluated.
Carriage Hills 5601 Calmar Drive,
Apartments Montgomery, AL Multifamily $379,241
Arizona Commons 2040 North First
II Avenue, Tucson, AZ Multifamily $348,649
2030 East 2030 East Broadway,
Broadway Mesa, AZ Multifamily $121,367 Trustee sale has been scheduled.
1298 - 1400 1298 - 1400
Worthington Worthington Woods, Forbearance agreement in place on the A-
Woods Worthington, OH Multifamily $90,484 Note; negotiating B note.
1727 Main Street,
1727 Main Street Lamarque, TX Multifamily $93,825 REO
1700 Weatherly Special servicer filed for foreclosure but
Weatherly Drive, Stone borrower deposited funds to delay foreclosure
Apartments Mountain, GA Multifamily $333,793 and negotiate a discounted payoff.
CMBS: MEZZ 2006-C4; Special Servicer: Wachovia Bank; all loans are 90+ days delinquent
THE WATCH LIST NEWSLETTER 27