Landauer sells note secured by Times Sq. office building - Landauer Associates Inc

Landauer Associates, Inc., a leading international real estate counseling firm, has announced that its Loan Sale Advisory Group has closed on the sale of a $42 million mortgage note for a major life insurance company.

The note, secured by a 300,000 square-foot office building located at the corner of Broadway and 42nd Street in Manhattan, was purchased by The Witcoff Group of New York.

The loan had six years to maturity and was paying in accordance with the terms of the loan documents. However, mortgage payments in the past had not been fully covered by cash-flow from the property, but had been subsidized by the property owner. With the current hot property market in New York City, and Times Square in particular, the undisclosed life insurance company elected to test the waters to see if it could indeed sell this note at a price it considered attractive.

"Potential investors were told by Landauer of the seller's pricing expectations, and those that did not agree didn't spend much time evaluating the deal," said Tom Goodwin, managing director of the Loan Sale Advisory Group, located in the firm's Boston office. "For those that felt the pricing was realistic, Landauer made it easy to evaluate the opportunity. The rent roll of nearly 200 tenants was loaded onto valuation software and provided to potential investors and full copies of all the loan and property documents were made available on the Internet, subject to stringent security restrictions. Investors were also able to download any or all relevant documents (note, mortgage' property operating statements, etc.) as needed, instead of taking delivery of the full review files, which was an option as well. This ease of evaluation attracted more investors to the opportunity which, we believe, enhanced the price received by the seller," Goodwin said.

"As real estate markets have heated up again, both the primary and secondary markets for commercial mortgage debt have followed suit," he added. "This has in part been aided by the greater efficiency of the secondary market as compared with just a few years ago. Sellers are seeing the prices offered for loans coming up to levels where the loans can be sold often with no additional write-downs."

Landauer's Loan Sale Advisory Group provides evaluation, packaging and marketing of whole loans and participations, performing and non-performing, on assets throughout the United States. The Group's clients include banks, insurance companies, Wall Street firms, credit companies and private investors.

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