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GlobeSt.com UPDATE: Jamestown up in Arms Over 1211 Downgrade

NEW YORK CITY-In an exclusive interview, the owners of 1211 Ave. of the Americas claim they were never permitted "discussion" time before discovering their Class E pass-throughs were downgraded. They also protest that the downgrade happened despite the additional funds they shelled out for increased terrorism insurance.

By John Salustri | Updated on October 14, 2002

NEW YORK CITY-Ownership of 1211 Ave. of the Americas is up in arms over the downgrade by Moody’s Investors Service of their class E commercial pass-through certificates. The downgrade, covered last week by GlobeSt.com, drove the building loan into special servicing–without the knowledge of the borrowers, claims Stephen J. Zoukis, a partner at Jamestown. Jamestown is actually the general partner in Jamestown 21 LP, 1211′s ownership entity. Nationally, the group holds a $3.4-billion real estate portfolio, $2 billion of which is in New York City.

But Jamestown’s beef isn’t with Moody’s. According to Zoukis, the first they heard of the dilemma was when Jamestown went for bank approval on certain building upgrades. “Fat, dumb and happy, we package the request and ship it off to the Bank of New York,” he recalls. “We wait a couple of days and don’t hear anything. We call them up and they tell us our loan was assigned to special servicing and that we’d have to call [special servicer] Orix. That’s how we found out about this.”

That was actually the climax of what managing director and general counsel Matt Bronfman describes as a frustrating string of phone calls stretching back to June 20. “Our first communication from BNY reminded us that we had to show evidence of coverage,” he explains. “August 10 was going to be the first renewal date of our policy since Sept. 11, 2001.”

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