July 22 (Bloomberg) -- A $46.4 million loan backed by Los Angeles’ Capitol Records building, where Frank Sinatra, the Beach Boys, Nat King Cole and Judy Garland recorded, was sent to a special servicer today, Fitch Ratings said.
The master servicer is Midland Loan Services and the special servicer is CT Investment Management, according to the debt-rating company. The loan, sponsored by Millennium Partners and Argent Ventures, is scheduled to mature on Oct. 15, Fitch said in a June 23 report. Mortgage servicers specialize in restructuring troubled debt.
The loan is backed by the 13-story building, which resembles a stack of vinyl records and was the world’s first circular office tower, along with two parcels of land being used for parking, Fitch said. Capitol Records built the property, near the intersection of Hollywood Boulevard and Vine Street, in 1956, and “Walk of Fame” stars for John Lennon and Garth Brooks are in front of it, according to Smithsonian.com.
Capitol is leasing the entire 106,000-square-foot (9,800-square-meter) tower through 2016 and has two five-year extension options, Fitch said. It’s paying $23.68 a square foot, less than the average fourth-quarter asking rent of $36.35 in the area, according to the rating company.
“At issuance, it was expected that ownership would up-zone and redevelop the two development parcels,” Fitch said. “However, this plan stalled due to the economic downturn.”
Voicemails left for Millennium and Argent weren’t immediately returned.
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