(ATLANTA) -- The recent forced public auction of Bank of America’s signature 55-story office tower in Atlanta is yet another example of the U.S. foreclosure crisis.
Experts say Atlanta’s troubles are the result of overbuilding and inflated office building prices due to the issuance of commercial mortgage-backed securities (CMBS). Some $5.8 billion worth of five-year office loans, bundled into CMBS, must now be refinanced nationwide.
With so much debt, experts predict that more distressed properties will come into the market, and the price per square foot of commercial office space will continue to fall.
“It’s a fine building, a beautiful building, and still very much a landmark,” Atlanta real estate expert Kirk Diamond told Bloomberg News. “It just needs to be recapitalized.”
The tallest tower in the state went for $235 million at auction, after owner BentleyForbes missed mortgage payments.
BentleyForbes bought the building from Bank of America Corp. in 2006 for $436 million. Bank of America also sold what had been its namesake office tower in San Francisco, now called 555 California Street, for $1.05 billion in 2005.
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