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Broadway, Lehman in Loan Accord

NEW YORK CITY-Broadway Partners founder Scott Lawlor says the agreement 'takes care of all of Broadway's near-term debt obligations in this portfolio.'

By Paul Bubny | Updated on July 23, 2009

NEW YORK CITY-Broadway Partners and Lehman Brothers Holdings Inc. said Wednesday afternoon that they have “”restructured and resolved” all near-term debt obligations on a 10-property portfolio owned by a Broadway-managed fund. The agreement entails a joint venture in which Broadway will contribute capital and retain an ownership interest in seven of the 10 properties, which the locally based investment company bought in 2005 for $5 billion from Beacon Capital. Bloomberg reported that the accord stemmed from two bridge mezzanine loans held by Lehman and totaling $459 million.

Under the agreement, Broadway will maintain ownership interest in 100 Wilshire Blvd. in Los Angeles; 100 California St., One Sansome St. and 50 Beale St. in San Francisco; 116 Huntington St. in Boston; One Fair Oaks Plaza in Fairfax, VA; and Greensboro Park in Tysons Corners, VA. According to a joint statement from the two companies, the capital contribution is critical to maintaining the properties’ class A status and to ensure “a stable and positive experience for current and future tenants. Funds will be used for anticipated leasing costs as well as capital upgrades of certain assets.”

The agreement stipulates that Broadway cooperate with Lehman to transfer ownership of the remaining three properties “in an orderly manner.” They include Bay Colony Corporate Center in Waltham, MA; 120 Howard St. in San Francisco; and 100 Wall St. here. Broadway’s other Boston-area holdings formerly included the John Hancock Tower, one of 10 assets Broadway bought from Beacon in a $3.3-billion 2006 deal. The iconic Boston tower was sold to Normandy Real Estate Holdings at a discount earlier this year.

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