Court To Northland: Money By Mid-January Or You Lose CityPlace II
December 02, 2011
Northland Investment Corp. is dangerously close to losing a second office tower in downtown Hartford to foreclosure.
CityPlace II, an 18-story tower on the corner of Asylum and Trumbull streets, came under a judgment of strict foreclosure earlier this week in Superior Court in Hartford — the last step before a building owner loses title to a property.
If Northland can't pay off its mortgage or secure financing by Jan. 17, it will lose the 294,000-square-foot tower. The only other option to stop the loss of the building would be Northland filing for bankruptcy, commercial real estate experts said.
The ownership of CityPlace II is separate from the larger CityPlace I, even though the two structures are physically connected to each other.
Northland had no comment Thursday.
A year ago, Northland lost Metro Center — the first office building it purchased in downtown Hartford — to foreclosure. In addition to CityPlace II, Northland's Goodwin Square, which includes the long-shuttered Goodwin Hotel, also is in foreclosure.
CityPlace II sank into foreclosure in late 2009, and court documents show a contentious relationship between Northland and LNR Partners, the mortgage servicer pursuing the foreclosure. Northland has accused LNR of refusing to negotiate, linking the foreclosure at CityPlace II to the one at Goodwin, which LNR also is handling.
Northland also blamed LNR for its failure to secure Bank of America as a major tenant for CityPlace II when the bank moved its corporate offices out of 777 Main Street. Instead, Bank of America inked a deal at CityPlace I.
CityPlace II was constructed in 1989 at a cost of $64 million. It was acquired by Northland in 1999 for $33 million.
Court documents show Northland took out a $25 million mortgage on CityPlace II in November, 2006, and that Northland has not made a payment since June, 2009. Northland now owes $31.7 million on the loan, court documents show.
As of late August, the fair market value of the property assigned by the city of Hartford was $12.8 million. Currently, CityPlace II has an availability rate of 30 percent, on the higher end of towers in the city's central business district. The rate, which includes space tenants are trying to sublease, amounts to 87,450 square feet of vacant or available space.
Reprinted with permission of the Hartford Courant.
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