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Mezz Lender Takes Over Newport Lofts

LAS VEGAS-Pyramis Global Advisors has assumed control of Newport Lofts, a 21-story condominium development here that was completed last year by Seegmiller Partners LLC.

By Brian K. Miller | Updated on January 27, 2008

LAS VEGAS-Newport Lofts, a 21-story, 156-unit condominium project here that was completed last year has been taken over by the mezzanine lender for the project, a fund managed by Pyramis Global Advisors, the institutional asset manager for Fidelity Investments. The property was developed by Seegmiller Partners LLC, which consists of investors Wes and Clark Seegmiller.

Dwight Frankfather of Corus Bank, the first mortgage construction lender, tells GlobeSt.com that Seegmiller was able to sell approximately 100 of the 168 units before the market collapsed in the second half of 2006. As is typical, all proceeds went to the first mortgage lender, enough to pay it down “to a loan-per-sf [amount] where we think we are really quite safe,” Frankfather says.

With no more proceeds to pay off the Corus loan, let alone the mezzanine loan, Frankfather confirms that Pyramis opted to foreclose, taking over the unsold portions of the project and, therefore, the responsibility for paying the bills. Those bills include the interest expense on the Corus loan, which is being paid, Frankfather says.

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