RICHMOND, Va. -- The loans on three downtown office towers are in distress.
Riverfront Plaza’s twin towers at 901-951 E. Byrd St. and the Bank of America Center at 1111 E. Main St. are each facing scrutiny from the noteholders that own the debt tied to the properties. The loans, which have a combined balance of $96 million, recently entered special servicing, according to reports from commercial real estate data firm Trepp.
Loans on large commercial properties are often packaged and sold into commercial mortgage-backed securities, which are bonds made up of various loans on various buildings. When a given loan in the bond is at risk of going into default, the noteholder (the entity that’s owed the money) will place that loan into special servicing.
Special servicers are independent firms that act as mediators between noteholders and borrowers. If a solution isn’t reached during special servicing, the process can end with the building going into a forced sale or foreclosure.
