Built one year apart (2000 and 2001), DEP I and DEP II are 6-story Class A office buildings with 189,832 and 189,764 of rentable square feet, respectively. The investment was sourced through a strategic partnership with the controlling class bondholder on a number of CMBS trusts, through the assignment of their Fair Value Purchase Option. The defaulted senior note, which was secured by the property, was acquired at an 8.5% discount to par.
As lender we negotiated with the borrower to obtain a deed in lieu of foreclosure within three weeks of purchasing the loan out of the CMBS trust. Additionally, shortly after closing, a lease extension with the 300,000 square foot anchor tenant was executed, enabling the sale of the property just eight months after acquiring the note, significantly ahead of initial projections.