The owner of the Miami Dolphins recently agreed to the terms of a mortgage modification in order to avoid foreclosure on a building that he controls in Florida. The modification news came right before the holidays, which most likely resulted in a huge sigh of relief for Barnes & Noble and Macy's, which are both housed in the 756,471-square-foot CityPlace mixed-use center.
According to sources, CityPlace, which is also home to apartments and offices, had been having financial problems for some time, and as far as April stopped making payments on the $150 million mortgage. An analysis of what mostly happened to cause the default revealed that CityPlace was simply not making enough in revenue to afford the mortgage.
After defaulting, a commercial mortgage-backed securities trust filed foreclosure, which meant that without some kind of a solution, the lender could end up taking the mixed-use center back from the owner.
As of now, it is known that the owner of CityPlace has accepted a loan modification. And while the exact terms of that modification are unknown, it appears that the monthly mortgage payments have been lowered. The loan was also reportedly split into two separate tranches, with what is being called "tranche B" being granted a lower interest rate.
Additionally, the loan was extended until December 2018.
In the end, this modification shows that there are often options outside of just accepting foreclosure, and that there are scenarios where it is possible to work with lenders to receive mortgage terms that are more feasible for an owner.
Source: South Florida Business Journal, "Dolphins owner scores loan modification on CityPlace," Brian Bandell, Dec. 22, 2011