Mapeley, the real estate investor majority-owned by Fortress Investment Group, has lost control over a further 16 assets of its UK property empire after special servicer Solutus Advisors appointed First Investments as LPA receiver over the underwater securitised loan.
Carrie Sharp and Neil Forkin of First Investments have been appointed as joint LPA receivers on the Mapeley II loan, which is secured by a pool of 16 offices – dubbed the “Beta” portfolio – throughout the UK.
Mapeley’s “Beta” portfolio has fallen in value by 51.7% in the six years to January 2012 – from £278.1m to £134.29m, according to DTZ, driven by the collapse and lack of recovery in regional market values, a run-off in leases and an absence of capex to sustain individual property’s fullest value.
The outstanding balance of the Mapeley II loan – securitised by Deutsche Bank in the DECO 8 – UK Conduit 2 CMBS – is £189.17m, which puts the securitised portfolio’s LTV at 140.86%.
The Beta portfolio, which has a net rentable floor area of 1.18m sq ft, includes the 246,004 sq ft Microsoft Campus office complex in Reading, which was bought in last 2005 for £104.3m, and is now estimated to be valued at between £70m to £80m, after tenant Microsoft signed a new 15-year lease extension in 2012.
Beta has an occupancy level of 93.27%, a weighted unexpired lease term of 5.78 years across the portfolio. With the exception of the 15-year Microsoft Campus property, the portfolio’s remaining unexpired lease is just 2.4 years.
The next six largest assets are:
- the 232,631 sq ft Tri Centre, purchased for £47.325m;
- the 55,874 sq ft Oak House in Watford, purchased for £22.25m;
- the 100,925 sq ft Rowland House in Chesterfield, purchased for £19.675m;
- the 100,152 sq ft Sussex House in Burgess Hill, purchased for £17.3m;
- the 98,102 sq ft Southgate House in Gloucester, purchased for £14.75m;
- the 68,643 sq ft Friars House in Coventry, purchased for £12.8m.
The Beta portfolio now comprises 20 tenants which together deliver a total gross passing rent of £14.69m pa – down from 24 tenants delivering annual rent of £20.3m at the time of securitisation seven years ago.
First Investments, founded by Tim Knowles, has received several appointments by Solutus Advisors since the special servicer launched in 2010, including managing agent and LPA receivership contracts arising from CMBS loans.
Solutus and First Investments are still devising a disposal and asset management strategy for the portfolio.
There are now three separate Mapeley UK securitised loans which are under the control of LPA receivers, which also include:
- DECO 6 CMBS – Mapeley I loan: Hatfield Philips appointed Jones Lang LaSalle as LPA receiver over the 18-strong UK secondary property portfolio in July, valued at £74.74m last January. Two Scottish assets are under separate LPA receivership. For a full list of this portfolio, please see here.
- Deco 11 CMBS – Mapeley Gamma loan: DTZ was appointed as LPA receiver over Mapeley’s £116m UK secondary office Gamma portfolio, enforced in mid-December by special servicer Hatfield Philips International.
These three portfolios are part of five separate securitised portfolios, which also including the remaining 168-strong Mapeley Columbus’ portfolio – in Morgan Stanley’s Perseus ELoC 22 CMBS – now worth £108.1m; and around 100 assets in Mapeley Loan portfolio, a Merrill Lynch-issued Taurus 2006-2 CMBS.
The performing Mapeley loan portfolio was collectively worth £395.6m last April, with £151.34m in remaining debt.
CoStar News wrote an analysis of the five securitised Mapeley loans last November, which can be viewed here.