Appraisal Reduction Climbs on Loan Backed by Everest Portfolio in Massachusetts

125 Walnut St in Watertown, MA via Showcase.com

125 Walnut St in Watertown, MA via Showcase.com

The appraisal reduction on the $54.9 million Everest Portfolio loan was bumped to $29.865 million this month, according to Trepp. The loan had been carrying an appraisal reduction of $21.9 million as of July.

The note originally had a balance of $62.5 million and was backed by a portfolio of eight buildings in Massachusetts, but two of the properties – 99 and 199 Rosewood in Danvers, Mass. – were sold last year.

A third party manager has been hired for the remaining properties, according to servicer notes on the assets, and marketing materials for the six remaining properties have been completed. The property in Watertown, which is directly across from Harvard University’s Arsenal on the Charles, was released to the market in July 2013.

Following is the address and loan balance for each of the remaining properties:

1) Chelmsford Flex R&D
Allocated Loan Balance: $15,560,149
Address:
220 & 222 Mill St & 25 Industrial Ave
Chelmsford, Mass

2) Northwoods Business Park
Allocated Loan Balance: $14,934,229
Address:
99 and 199 Rosewood Drive
Danvers, Mass

3) Watertown Technology Park
Allocated Loan Balance: $10,371,602
Address:
101 and 121-125 Walnut Streeet
Watertown, Mass.

4) Southborough Office Park
Allocated Loan Balance: $9,125,253
Adress:
118 Turnpike Road
Southborough, Mass.

5) Acton Office
Allocated Loan Capital: $4,914,020
Address:
289 Great Road
Acton, Mass.

Most of the reduction to the current balance of $54.9 million came from amortization on the loan, which began in 2006, according to Trepp. The loan did see repayments totaling nearly $7.6 million last October – which Trepp presumes was from those property sales – but that sum was used only for expenses.

Issues with the original loan stem in part from Sycamore Networks, a firm that investors voted to dissolve earlier this year. The one-time Internet darling had a market cap of $45 billion at one point and also had a big chunk of space in the Everest Portfolio, Trepp reports.

The properties were originally transferred to a special servicer due to imminent default in June 2009. At the time, there was a lawsuit from the leasing broker who had not been paid leasing commissions and there were also issues with the majority owner’s liquidity to keep the loan current.