NEW YORK, March 5 SL Green Realty Corp's
(SLG.N) loan on the retail portion of a Fifth Avenue skyscraper
will unlikely be hurt after the building's owner requested that
its $1.22 billion loan on the office part of the building be
modified, according to UBS analysts.
After the real estate journal The Real Deal reported that
Kushner Cos have requested that its loan be transferred to
special servicing, UBS said that SL Green's loan on the retail
portion of 666 Fifth Avenue is unlikely to be affected.
Kushner bought the building in January 2007 for $1.8
billion and in July 2008 sold a 49 percent stake in the retail
portion of the building to Carlyle and Crown Acquisitions for
Carlyle's financed its purchase with $460 million in debt,
including a $135 million junior loan from SL Green. The loan
had a book value of $104 million at the end of 2009, UBS said.
Kushner is seeking to transfer the loan secured only by the
office part of the building.
A special servicer oversees troubled loans that have been
securitized into commercial mortgage-backed securities (CMBS).
SL Green, one of the largest Manhattan office landlords
also acts as a lender to other real estate owners.
Shares of SL Green, a real estate investment trust, closed up
4.9 percent percent at $55.40, outperforming the benchmark MSCI
U.S. REIT Index .RMZ which rose 2.7 percent.
According to the Real Deal article, Kushner Cos has asked
to transfer the loan on the office as a proactive measure. The
loan is not in default and does not mature until Feb 2017. But
the property is only generating 0.6 times its monthly debt
service and two large tenants -- Citibank and Orrick-- are
either leaving or are expected to leave shortly.
(Reporting by Ilaina Jonas; Editing by Tim Dobbyn)