1M-SF Project Has Money Trouble

BOSTON-The proposed double office towers at One Congress St. are encountering some cash-flow issues, notes the Boston Business Journal . Raymond Property Co. had planned the demolition of the Government Center Garage in order to build the project, which has run into more than a couple delays, not least of which is the replacement of Ted Raymond with Thomas O’Brien and his HYM Investment Group after the Environmental Protection Agency vacated lease space.

The mortgage on the property is currently at $209 million, divided into two parts, a $190-million piece, which Fitch Ratings has noted as a “loan of concern” and an $18.5-million piece. “The borrower has requested draws from the debt service reserve to fund monthly shortfalls,” Fitch says in its report.

With little cash flow, simply servicing the loan is becoming a fast-approaching issue for the project. And Fitch’s estimates, based upon the rising vacancy and lowering property values, the project’s LTV is roughly 130%.