Related topics

$46M loss for Matrix investors

November 20, 2018 GMT

In completing the $17 million purchase of Matrix Corporate Center last month, Summit Development promised to turn around a Danbury property “that ended up going in the wrong direction,” in the words of developer Felix Charney.

As for the lenders who invested in debt backed by the 1 million-square-foot complex? There was no U-turn to be had, with investors taking a $46 million loss on mortgage-backed securities linked to Matrix.

In a final report this week on a commercial mortgage-backed security loan on Matrix, the CMBS analysis firm Trepp stated the Matrix loan had been scheduled to mature in August 2018, and kept current through the tapping of reserves.


Charney had pounced in August with an offer for Matrix, with the 39 Old Ridgebury Road property having been renamed The Ridge at Danbury after completing the purchase in October. Charney plans to convert a portion of The Ridge at Danbury into residential dwellings and retail, while maintaining some of the complex as offices that as of September had just 18 percent of available space under lease.

New York-based Matrix Realty Group had acquired the former Union Carbide headquarters in 2009 for $72 million, then put it up for sale after firm’s owner died in December 2015, along with far smaller office building at 535 Connecticut Ave. in Norwalk purchased for $16.5 million by Greenwich-based Hanover Real Estate Partners.

Matrix Corporate Center revenue plunged more than 40 percent last year to $8.7 million, according to CMBS records published by Trepp, with two major tenants pulling out in Boehringer Ingelheim Pharmaceuticals and Praxair, now part of Linde Group.

That sent the property’s net operating income to $1.5 million last year from above $7 million in 2016, as recorded by Trepp, with expenses last year including $1.6 billion for utilities like electricity; $1.4 million for payroll costs on staff running Matrix Corporate Center; and $1.1 million in real estate taxes.

Matrix Realty Group also drastically reduced expenditures on building maintenance and repairs in its final full year running Matrix Corporate Center, with Trepp tracking $400,000 in upkeep last year, a third the level of 2016 and in prior years. In December 2017, Matrix Corporate Center tenant Chipman, Mazzucco, Land & Pennarola sued Matrix Realty Group over its management of the building, with the law firm seeking to be released from its lease.

Alex.Soule@scni.com; 203-842-2545; @casoulman