CHICAGO-Trizec Properties Inc. continues to balk at suggestions it should hang a “for sale” sign from the 110-story Sears Tower. However, president and CEO Timothy H. Callahan opened that door a bit Thursday.
“We're not ready to make that decision yet, but that doesn't mean we won't do so at some point in time,” Callahan says during an earnings conference call. “It's still premature to go into that discussion.”
Trizec Properties Inc., which has managed the tallest building in North America, was scheduled to take title to the building Jan. 2 by converting its second-mortgage into an ownership position by assuming a first mortgage held by Metropolitan Life. However, necessary paperwork remains slow in coming from a Sears Roebuck & Co. subsidiary.
“We are still waiting for the documentation to be completed on Sears' side in order for us to actually take title,” Callahan says. “We assume that will happen some time before the end of the first quarter.”
Likewise, there is no news on talks with Metropolitan Life, whose first mortgage has a balance of $769.2 million, which represents 93% of the 3.5-million-sf asset's most recent appraisal.
“We are still talking about the conditions precedent to achieving loan modifications,” Callahan says.
A subsequent sale of the trophy property has been suggested by some analysts, who note the REIT would be adding a significant amount of debt to an already encumbered balance sheet.
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