Tishman Speyer Joins Ranks Of TBTF As Fed Gives Real Estate Firm Taxpayer Subsidized Tip
For all who think that the Fed has received the Ukrainian-cum-Marriott Garden Inn unlimited one-hour special giftset only from the TBTF banks, you are wrong: it appears the broke real-estate industry has also provided some favors to the FRBNY, and is now demanding, and receiving, preferential treatment. Tishman Speyer, whose 5.7 million sq. foot portfolio acquired from Blackstone in 2007, has been unable to renovate its insolvent properties as lenders have been unwilling to negotiate a restructuring. One of the lenders is none other than the Federal Reserve, which took over loan commitments by Bear Stearns. Crains New York reports that the FRBNY has finally relented and at what likely is a loss to taxpayers, has given Tishman $100 million to restructure its loans at preferential terms. Tishman's take on this development was pretty clear: "It's great for our tenants and it's great news for everybody we do business with,” said Casey Wold, Tishman senior managing director in Chicago. “We now have enough capital to improve the properties and lease up the entire portfolio to stabilization." Thank you taxpayers - you now have indirectly bailed out the following Chicago properties: Civic Opera Building, 10 & 30 S. Wacker Drive complex,1 N. Franklin St., 161 N. Clark St. and 30 N. LaSalle St.
More from Crains:
Tishman Speyer Properties has reached an agreement to restructure a $1.4-billion loan package covering five downtown Chicago office properties, a move that should help the buildings compete for tenants in a tough leasing market.
Manhattan-based Tishman had been negotiating a restructuring for months with lenders including the Federal Reserve Bank of New York, which took over the loans on the properties after the 2008 collapse of Bear Stearns Cos., the original lender.
The Fed last year froze reserve accounts set up to pay for tenant improvements and leasing commissions, hurting Tishman's ability to attract tenants to the buildings, which include landmarks like the Civic Opera Building and the 10 & 30 S. Wacker Drive complex.
Under the debt restructuring, money will now be available to cover those costs.
Under the agreement, more than $100 million is expected to be made available to cover tenant improvements and leasing commissions, with more than $50 million being directly invested by Tishman. The maturity date on the loans also will be extended to 2014 from 2012.
Tishman financed the $1.7-billion acquisition with about $1.4 billion in debt. The Fed is still holding about $737 million in loans after selling the rest.
We except that calls from the Fed for a complete collapse of the office real estate market will join in threats of financial systemic anihilation if the Pittman litigation against the Fed is not overturned before the time the Supreme Court is asked to chime in on the case, which should be some time just before the mid-term elections. Of course, by then the now discredited SCOTUS will opine on behalf of the employer of this administration, which will be the final straw to unleash the extremist right wing anger that Bob Janjuah warns about earlier.
h/t Richard Kimble