Bank of America Plaza Default "Imminent"

By Jim Burress

Atlanta, GA – Default on the Bank of America Plaza is "imminent," according to a just-released report from Fitch Ratings.

It said the 55-story tower, the largest in the Southeast, has been handed over to a special servicing company that will handle the default process.

"It's a great location, and a great product, but you just can't pay too much and borrow too much and expect to get away with this," said Emory University real estate professor Jim Grissett. But that's exactly what happened in 2006, Grissett said, when L.A.-based BentleyForbes purchased the skyscraper in 2006. The company paid $436-million.

"It was a high price and it was debt that was probably unsustainable."

Grissett said the servicing company won't close the building's doors, but instead will work to boost rental rates or in some other way make Bank of America Plaza more attractive to tenants.

[After WABE's story originally aired, BentlyForbes provided WABE with the following statement:

BentleyForbes requested the loan for Bank of America Plaza in Atlanta to be moved to special servicing to begin the process of reviewing options on the underlying capital structure. At present, the loan is current and performing. This was a strategic decision made after discussions with LNR, who will be working closely with BentleyForbes as the special servicer to determine next steps moving forward.

Tony Manos, Chief Operating Officer, BentleyForbes]