Gramercy Capital Corp., New York, has received a one-month extension in the maturity date from lenders on $791 million in loans for a payment of $3.5 million.
The loans were due yesterday; the extension until April 15 gives Gramercy time to negotiate a longer-term extension, modification, restructuring or refinancing.
The loans in question are a $241 million loan from Goldman Sachs Mortgage Co., Citicorp North America Inc., and SL Green Realty Corp.; and senior and junior mezzanine loans totaling $550 million from KBS Debt Holdings LLC, along with the three previously mentioned lenders.
If Gramercy is unable to renegotiate the loans, the lenders could foreclose on the properties owned by its Gramercy Realty division that were used as security. If the lenders do elect to foreclose, Gramercy Capital will have a substantial book loss for 2010 and this would result in the company having negative book value.
Because of the uncertainty, Gramercy is delaying the issuance of its 2010 results.
According to the company's third quarter 10-Q filing, the Goldman mortgage loan is collateralized by approximately 195 properties held by Gramercy. The mezzanine loans are collateralized by the equity interest in substantially all of the Gramercy Realty division, including its cash and cash equivalents totaling $32,428 of the company's unrestricted cash as of Sept. 30, 2010.
The filing added Gramercy does not expect that it will be able to refinance the entire amount of indebtedness under all of those loans prior to their final maturity and it is unlikely to have sufficient capital to satisfy any shortfall.
