Chauncy Street property weighs on mortgage portfolio

Chauncy Street property weighs on mortgage portfolio

Two local properties — 38 Chauncy St. in Boston and the Fresh Pond Shopping Center in Cambridge — are having markedly different effects on a $780 million portfolio of mortgage securities packaged and sold by GE Commercial Mortgage Corp. in 2002.

The local office and retail properties were highlighted in a recent Moody’s Investors Service report on the GE portfolio of commercial mortgage pass-through certificates. Those securities are collateralized by 122 mortgage loans, according to Moody’s.

As of the report’s Dec. 10 publication, five of the GE portfolio’s loans have already been liquidated, accounting for $6 million in losses. Another 19 loans have been watchlisted over performance concerns and four others, representing 4 percent of the portfolio’s total loan balance, have shifted to special servicing.

The largest among those specially serviced loans is the $19.9 million mortgage backing 38 Chancy St., a property that was profiled in a May 31 story in the Boston Business Journal. As reported earlier this year, the property, also known as the Windsor Building, transferred to special servicing due to default concerns over a net cash flow that covered only 76 percent of the site’s debt service.

The Windsor Building was acquired in 2007 by a partnership involving Haveland Estates and investment giant BlackRock Inc. Attempts to reach Haveland’s offices in Stamford, Conn., were not successful. A call to BlackRock was not immediately returned Monday.

In May, a source familiar with the property and its financial issues said the ownership group was seeking a loan modification.

The Dec. 10 Moody’s report did not offer an update as to whether such a modification has occurred, however it did say a $9.1 million appraisal reduction was recognized for one of the GE portfolio’s four specially serviced loans. Moody’s also said it has estimated $18.5 million in losses for all of the portfolio’s specially serviced loans.

Moody’s said the portfolio’s top three performing loans comprise 12 percent of the loan pool’s balance and are generating solid revenue that more than covers debt-service obligations. The third-largest loan highlighted is the $27.6 million debt backing the Fresh Pond Shopping Center in Cambridge. Moody’s said the 213,000-square-foot retail plaza is 95 percent leased and boasts a loan-to-value ratio of 64 percent.

Moody’s said the largest performing loan in the GE portfolio is a $34.9 million balance backing 453,000 square feet of office space in Dearborn, Mich. That property is leased by Ford Motor Co.

Boston Business Journal

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