US skyscraper sold at auction

Bank of America Plaza, the tallest tower in the US Southeast, was sold at a public auction yesterday on the steps of the Fulton County Courthouse after landlord BentleyForbes missed mortgage payments.

The noteholder had a winning bid of US$235 million ($281 million), said attorney Howard Walker of McGuire Woods, who ran the auction.

Holders of commercial mortgage bonds took ownership through a "credit bid" placed by LNR Partners, David Levin said.

Levin is vice-chairman of LNR Property, the parent company of LNR Partners, the tower's special servicer.

BentleyForbes, based in Los Angeles, paid US$436 million to acquire the 55-storey Atlanta skyscraper in 2006 from Bank of America and Cousins Properties in the city's biggest property deal.

Since the property market peaked a year after the purchase, the 116,000sq m building's value has tumbled with tenants, including namesake Bank of America, reducing space.

Atlanta has the highest rate of late payments for loans on offices bundled into bonds among the largest US metropolitan areas, at 25.3 per cent, according to data compiled by Bloomberg.

That's an increase from 10.4 per cent a year ago and is more than triple the 7 per cent national rate.

The US$363 million Bank of America Plaza loan became delinquent in December after BentleyForbes stopped making payments.

The loan was partly packaged inside JPMCC 2006-LDP9, which was downgraded by Fitch Ratings in December last year because of predicted losses.

- Bloomberg