Report: Rockefeller Group Lacks Cash for Rockefeller Center Mortgage
NEW YORK (AP) _ The Japanese-controlled owner of Rockefeller Center is short on cash to pay its mortgage and may be close to defaulting on its loan, The New York Times reported today.
The Times cited government filings by the investment trust that holds the $1.3 billion mortgage on the property.
The center’s owner is The Rockefeller Group, which is 80 percent owned by Japan’s Mitsubishi Estate Co., one of the world’s largest real estate companies. The Rockefeller family owns 20 percent.
Its sale to the Rockefeller Group in 1989 was one of the most prominent Japanese investments in th United States.
Rockefeller Center has 12 landmark buildings housing NBC and Radio City Music Hall among others. Its outdoor ice rink is a major tourist attraction.
Heirs to John D. Rockefeller Jr. sold a controlling interest in the property to the Mitsubishi Estate just before the real estate market in New York City collapsed and office vacancies surged.
If Mitsubishi Estate defaults, ownership of Rockefeller Center goes to the mortgage holder, a real estate investment trust called Rockefeller Center Properties, which was set up to finance the mortgage via stocks and bonds.
Mitsubishi Estate could also try to renegotiate the mortgage to reduce the principal amount it owes.
Calls today to Rockefeller Center Properties and Rockefeller Group were not immediately returned.
It said Masaaki Kono of the Mitsubishi Estate said in Tokyo, ″Rockefeller Group is in charge and it is not appropriate for us to comment now.″
The Times said Mitsubishi Estate has been forced to subsidize its share of the $460 million gap between Rockefeller Center’s rental income and its mortgage payments during the last nine years.
In quarterly filings with the Securities and Exchange Commission on Monday, The Times said, Rockefeller Center Properties said the Rockefeller Group’s ″cash shortfalls raise substantial doubt about the borrower’s ability to continue as a going concern.″
The paper said Rockefeller Center lost $39 million in the first nine months of this year, about the same amount it lost last year.
It said Rockefeller Center is worth between $900 million and $1.15 billion, less than its mortgage.