Terminal Tower, Cleveland headquarters of Forest City Enterprises, has overdue loan; developer must go to "special servicer" to revise terms
A $38 million loan secured by Terminal Tower, the Public Square skyscraper the Guide to Cleveland Architecture calls “the landmark of the city,” is overdue.As with other buildings that are worth less than previously valued and not delivering the once-predicted revenues, the loan has been assigned to a "special servicer" to revise and extend loan terms and even potentially re-assign ownership.
How that debt will be resolved by the building's owner, real estate giant Forest City Enterprises Inc. — which has its headquarters and more than 500 employees in the 52-story structure — remains to be seen.
Forest City, the parent of Brooklyn-based Forest City Ratner, for example, recently spent more than $40 million on a renovation "that qualified for state historic tax credits," according to Crain's.
According to Crain's, "the nearly 525,000-square-foot office portion of Terminal Tower is 21% vacant, with almost 124,000 square feet of space available"--actually more full than downtown office space and older class B buildings in Cleveland.
As the article hints, Forest City doesn't want to lose its headquarters. And debt-holders want to get paid, in some way. So the bet here is that the company will figure something out that does the least damage to its bottom line--and maintains its presence.