Hercules Plaza CMBS note back in special servicing

The largest loan in the Wachovia Bank Commercial Mortgage Trust 2006-C25 (WBCMT 2006-C25) CMBS securitization has been transferred back into special servicing, Fitch Ratings warned this week.

The largest loan in the Wachovia Bank Commercial Mortgage Trust 2006-C25 (WBCMT 2006-C25) CMBS securitization has been transferred back into special servicing, Fitch Ratings warned this week.

imgresThe $65.1 million Hercules Plaza note, tied to a 518,409 sq ft, 12-story urban office building located at 1313 N. Market Street Wilmington, Delaware, comprises 33.54 percent of the deal. 

The loan had been modified by the special servicer in 2014, at which time the loan was extended two years through 2018. The property was last appraised for $58.9 that year, a sharp reduction from its $118.5 million appraisal at securitization, according to Trepp.

At securitization, the property was also fully leased to Hercules Inc., a DuPont chemical spin-off, but the company aggressively reduced its space after it was purchased by Ashland. Ashland’s footprint is down to 24 percent of the space, which has helped push occupancy at the property down to 73 percent. The Delaware Board of Trade also opted not to renew its  15-year lease for about 10,000 sq ft earlier this year.

“DSCR (NCF) was 1.91x in 2012. However, that number only reached 1.07x, 0.93x, and 1.12x, respectively, each year from 2013 through 2015,” according to an emailed memo from Trepp.

Built in 1982, the property is located on Market Street between 12th and 13th Streets, overlooking the Brandywine River. Ownership recently launched 1313 Innovation, a collaborative work environment aimed at connecting the “local entrepreneurial community and universities with business leaders.”

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