Florida Retail Loans Undergo Modification

CRENews reported a modification by CWCapital that has become a common workout strategy. The two loans in question were jointly owned by Morgan Stanley Real Estate Fund V and Kitson & Partners with a total balance of over $282mm and 10 separate properties. The properties are mostly centered around Orlando and Fort Lauderdale, as you can see in this map.

•  Kitson paid all of the modification costs, in exchange for a 20% interest in any future proceeds that exceed the new A-notes.
• Kitson remains on the hook for a $8.8mm LOC for TI or CapEx for one mortgage as originally laid out in the docs.
• An existing $4.6mm debt-service reserve will be transferred to a TI reserve account and is expected to be used to cover TI in the near future.
• The coupons remain unchanged.
• The maturity date was extended from this year on one, and from 2017 on the other, to March 2019 in both cases.
• One mortgage was split into an 58%/42% A/B note structure, and the other was split into a 50%/50% A/B note structure.
• In both cases, the expenses are paid first, then to paying down the A note principal, then to replenishing a TI reserve, and then 80/20 to the B-Note and Kitson.

See CRENews.com for the full article - although they require a subscription, this article is offered publicly.