Wells Fargo has reported that Beacon Capital Partners just missed a $1.65 million mortgage payment on a $380 senior mortgage secured by the largest highrise office building in the Pacific Northwest. Located in downtown Seattle, Columbia Center was acquired by Beacon Capital in April of 2007 for $621 million, or $414 per square foot.
One of the building’s largest tenants, internet retailer Amazon.com, is scheduled to vacate over 177,000 square feet of space once its new headquarters opens in South Lake Union. This vacancy, along with another 433,000 square feet of availability, will leave the tower 60% occupied.
“When Beacon bought Columbia Center, it had net operating income of $31.8 million, according to [Manus] Clancy, of Trepp. With the recession, rents in the building have declined from $30.20 per square foot in 2008 to $24.90 per square foot last fall. Net operating income for the first three quarters of 2009 was $15 million, which was less than needed to service its debt.”
Even with the debt shortfall, some expect Beacon Capital to be able to hold on to the asset. “We have not seen many liquidations. We’ve seen many lenders, even commercial mortgage-backed securities servicers very much willing to work out a restructuring of the loan terms,” Dan Fasulo, Managing Director at Real Capital Analytics stated in a recent interview.
[Puget Sound Business Journal]
