Here's an odd thing:
The Trump Organization has defaulted on its CMBS loan on its 40 Wall St building - transferred to special servicer #MacroEdgeCMBS pic.twitter.com/wKgO7gGmwl
— MacroEdge (@MacroEdgeRes) November 10, 2023
Trump's 40 Wall Street property has been on watchlist for a while thanks to high costs and vacancy rates, but as near as I can tell they're up to date on their loan payments. It's not unheard of for a CMBS loan to be transferred from its master servicer to a special servicer due to trouble short of default, but it's unusual. I wonder what's going on here?
Clumsy attempt to hide assets.
"It's not unheard of for a CMBS loan to be transferred from its master servicer to a special servicer due to trouble short of default, but it's unusual. "
In the industry its termed technical default: the loan may be current (loan payments are not behind) but other elements of the loan agreement are breached, and that can trigger this issue.
examples include:
- occupancy level at the building is below a minimum requirement in the loan agreement
- the borrower is below the minimum liquid cash assets required in the loan agreement
- a default on an unrelated loan
- a failure to provide reporting
etc
Would "borrower fraudulently misrepresented value of the property" do the trick?
Receivership. False financial reporting. Failure to maintain required liquidity. Those are the ones that come to mind
I await the near-daily parade of above-the-fold
email serverloan default stories in all the major media.Why won’t the loan sharks kill the SOB? Biden will pardon them! 😂
No problem. Just claim it's worth a trillion bucks* -- you know, a fraction of Mar-A-Lago -- and refinance it.
*Standard disclaimer applies