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Tom Barrack Feels Pinch As REIT Defaults On $3.2B

Colony Capital has defaulted on $3.2B in loans for hotels and healthcare properties, the real estate investment firm founded by well-known investor Tom Barrack said in a Securities and Exchange Commission filing on Friday.

Colony Capital director Tom Barrack

Colony Capital's disclosure comes as it says it will suspend dividend payments and has drawn $600M from its revolving credit facility in an effort to lessen the financial impact of the coronavirus pandemic.

Its defaults come from a portfolio of 157 hotels and 357 healthcare properties, including 154 senior housing properties. Colony Capital did not specify the number of properties at risk. 

"The Company is in active negotiations with all lenders to execute forbearances and/or debt modifications, including extension of upcoming maturities in 2020, or seek other accommodations," it said in its filing."There can be no assurances that the Company will be successful in such negotiations."

A longtime friend of President Donald Trump, Barrack has repeatedly advocated for government support of the commercial real estate industry since the onset of the coronavirus outbreak. He penned a blog post in March that called for a suspension of margin calls and mark-to-market accounting, among other measures.

Last year, the company was the target of activist investors seeking the removal of Barrack as CEO because of his long-standing personal ties to Trump and public involvement in federal corruption probes.

The Financial Times first reported the disclosure from Colony Capital, which did not immediately respond to Bisnow's request for comment.