Columbia Property Trust Gets Modification of $1.7B Loan
A year after default, valuation of office portfolio slashed by nearly a third.
Columbia Property Trust, the office REIT which early last year defaulted on a $1.7B floating-rate loan backed by seven office buildings, has secured a reprieve from its lenders.
As part of the loan modification from lenders Goldman Sachs, Citigroup and Deutsche Bank, the maturity date on the loan will be extended to July 2025 and it will include a six-month extension option, according to a report from Morningstar Credit.
According to commentary from Morningstar and ratings agency KBRA, the modification also cuts the interest rates on a senior portion of the loan and defers payments on mezzanine debt.
The seven-building portfolio, which was valued at $2.3B in 2021, was reappraised last month for $1.6B, a 30% reduction, the report said.
The portfolio includes three office buildings in NYC-315 Park Avenue South, 229 West 43rd Street and 245-249 West 17th Street-and 650 California Street in San Francisco, 116 Huntington Avenue in Boston and 95 Christopher Columbus Drive in Jersey City.
The property at 650 California Avenue made headlines in late 2022 when its anchor tenant, then known as Twitter, stopped paying rent after Elon Musk bought the social media company. Columbia, which acquired the building in 2014 for $309M, sued Twitter.
The 43rd Street tower in NYC is the former headquarters of The New York Times. Columbia acquired 481K SF of the former Times tower in 2015 for $516M. The building’s two largest tenants, Verizon and Snap, both have lease expirations scheduled for 2025.
The six-floor retail portion of 229 West 43rd Street, owned by Kushner Companies, is being auctioned off on May 29, according to a notice from KBRA reported by Crain’s.
Columbia, which was acquired by Pacific Investment Management for $3.9B in 2021, said in a statement early last year that it was in discussions to restructure its loans with lenders including Goldman Sachs, Citigroup and Deutsche Bank.
“We, like most office owners, are addressing the unique and unprecedented challenges currently facing our asset class and customer base,” Justina Lombardo, a spokesperson for Columbia, said in a statement. “We have engaged with our lenders on a restructuring of our loan on seven properties within our larger national portfolio.”
The building’s top-two tenants, Verizon and Snap, both have lease expirations scheduled for 2025.