Hale said the 1st Mariner Tower is 92 percent leased and has positive cash flow. Besides 1st Mariner Bank, which has its headquarters at the tower, tenants include CareFirst, Comcast and testing service firm Prometric. Hale also lives in the penthouse as the tower's only resident.
Today, the tower, which was worth $150 million to $160 million at its peak several years ago, is probably worth $130 million, Hale said.
The biggest challenge facing Hale is the lack of financing available on the commercial real estate lending market.
"It's a very challenging time," said Susan Smith, director in the real estate group of PricewaterhouseCoopers in New York. "You have to realize the type of environment we are in right now. Regardless of whether it is new construction, an existing loan to refinance or a new loan that somebody is looking for, lenders are being extremely cautious. They are using stricter underwriting criteria in terms of looking at an asset."
Before the recession hit, lenders typically considered cash flows from commercial real estate as positive and growing because rental rates were increasing and demand for space was strong.
"All that has significantly changed," she said. "Nobody is foreseeing the bottom [in commercial real estate] right now. Nobody on the buying side or selling side and nobody in the commercial real estate lending area."
Hale said a refinancing deal with investment bank JPMorgan fell through early last year, and since then he has been looking everywhere, even considering traveling to Dubai to meet with bankers.
"There are no hedge funds, insurance companies, banks to go out and redo loans," Hale said. "I've been on a trek literally around the world trying to get this financed. And I have a lot of company."
Besides the French bank, Columbia-based office developer Corporate Office Properties Trust has a secondary loan between $26 million and $27 million on the Canton Crossing tower.
Randall M. Griffin, COPT's president and chief executive, said Tuesday that the foreclosure does not affect its loan, which was made last fall.
"It obviously puts Ed Hale in a difficult situation," Griffin said, noting the tower is an excellent property.
"He has to rectify the situation or look at alternatives. This is a pretty common situation, and he has to deal with it accordingly," Griffin said.
Griffin noted that the market for commercial real estate loans may not loosen up until next year.
