According to the Wall Street Journal, the most significant example of the pain: Boston-based Beacon this month defaulted on about $430 million in debt secured by one of the buildings in the deal, the 76-story Columbia Center in downtown Seattle. The building, one of the tallest in the Pacific Northwest, has had a cash crunch stemming partly from its falling occupancy rate, which has dipped to about 78.5% from about 90% in 2007. Meantime, according to the paper, rents have dropped to the high $20-a-square-foot range, down about $10 from what Beacon was asking soon after buying the property.
Like many mortgages made during the boom, Columbia Center's was repackaged with loans secured by other buildings and sold as commercial-mortgage-backed securities. The $2 billion CMBS issue that includes Columbia Center was acquired by such institutional investors as Allstate Life Insurance Co.
To read the full Wall Street Journal story, click here.
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