It was mentioned that the appraised value was $912 mil last year but was reappraised at around $826Mil but they are under the assumption that the appraisal has dropped big after 911. Also they want to know if congress will pass some kind of terrorism legislation before they make any committment.
The only one that is screwed is Metlife. They own the building and it's value has collapsed. TRZ wants to assume a much lower mortgage, get terrorism legislation before committing to this NON RECOURSE mortgage. That means the assets backs up the mortgage. Much lower mortgage will need to be assumed to make the building cashflow favorable. MetLife may have to absorb a huge loss on the mortgage. Hopefully it will drop substantially to justify lower rents. As far as I am concerned no committment has been made just assessing the situation.
Also mentioned that the stock price is trading at a 40-50% discount to peer valuations and bigger discount to asset value.
i agree with pcmsearch--no final decisions have been made. (though i disagree with pcm's appraisal statements; the $826m appraisal-done this year-incorporates the impact of 9/11.)
the last sentence of the article sums it up. their remaining value in this asset is dependent on getting both acceptable terrorism insurance and a renegotiated mortgage. i doubt met life wants to own the building and they're most likely willing to write-off part of their mortgage and restructure terms if it means keeping trz as managers and owner.