In today's post-bubble housing market, it's not uncommon for landmark buildings to fall into foreclosure. But this Atlanta tower is noteworthy for two reasons – it's the tallest skyscraper in the Southeast, and its sale smacks of irony.
The Bank of America Plaza, the 55-story skyscraper where BofA still holds office space, is scheduled to hit the auction block on Tuesday, the Atlanta Business Chronicle reports.
The building's current owner, BentleyForbes, fell behind on mortgage payments after buying the property from BofA and a real estate investment company in 2006.
Just as we've seen in the residential market, commercial buyers over-leveraged loans by betting on still-climbing prices. In 2006 the 1.25 million-square-foot property sold for $436 million. Today, it's worth less than half that, at approximately $202 million, Bloomberg reports.
The news comes as BofA and four other major lenders brace for what could be a record-breaking mortgage settlement, in which the nation's largest banks could face up to a $25 billion judgment for inappropriate underwriting practices known as "robo-signing."
All told, the five major lenders – Bank of America, JP Morgan Chase, Citigroup, Wells Fargo and Ally Financial – control two-thirds of the nation's mortgage servicing industry, Stateline reports. Mortgage wrongdoing has been found by every state attorney general involved in the settlement.
Perhaps spurred by the impending lawsuit, BofA announced that they're considering selling all of their corporate offices, with the exception of the New York and North Carolina headquarters.
Since the purchase by BentleyForbes in 2006, BofA has downsized its presence in the building from 400,000 square feet to under 200,000 square feet.
UPDATE: The Atlanta Journal Constitution reports that the Bank of America Plaza sold at auction to the property's bond holders for a $235 million "credit bid." That's almost half its original sales price of $436 million at the height of the bubble in 2006.
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