Tuesday, August 25, 2009
Banker: Penobscot Building in default

Christina MacDonald and Louis Aguilar / The Detroit News

The owners of the Penobscot Building, a 47-story landmark in downtown Detroit, have defaulted on bank loans and the bank is taking steps to foreclose.
According to an Aug. 7 letter sent to Penobscot tenants by mortgager Capmark Finance Inc., a unit of Capmark Bank, building owner PBDM LLC "committed events of default" in connection with its 2007 loan from Capmark.
A notice of default was filed with the Wayne County Register of Deeds on June 22. Capmark also filed a complaint of foreclosure in Wayne County Circuit Court on June 30; the case is pending.
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According to its Web site, the Penobscot was built in 1905. The building at 645 Griswold St. is 63.1 percent leased, according to CoStar Group Inc., a commercial real estate research and information service.
The global recession and the woes of the auto industry have hit Metro Detroit particularly hard. The office vacancy rate for Detroit's Central Business District is 27.8 percent according to CB Richard Ellis, a commercial real estate research and service firm. The decade began with a 17.1 percent rate. The U.S. average for downtown office vacancy is 13.7 percent, compared with 11.1 percent a year earlier, according to Colliers International, another commercial real estate brokerage firm.
laguilar@detnews.com [[313) 222-2760