Hertz Properties Group, an entity controlled by one of the biggest owners of downtown office properties, is raising concerns over its survival, tapping a chief restructuring officer to oversee a financial reorganization.
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Hertz said in a regulatory filing it has “significant doubts regarding the continued existence of the company,” CoStar News reports. Hertz Properties is a part of the Hertz Investment Group that is the 25th largest owner of U.S. CBD office properties, according to CoStar data.
Hertz Properties used about $200M in bonds issued on Israel's Tel Aviv Stock Exchange to finance 11 U.S. office properties. Those bonds are only partially repaid, and bondholders are set to meet over the next two weeks to discuss their redemption.
The company also detailed financial reporting irregularities in the filing.
Hertz Properties owns nine U.S. office properties accounting for about 4M SF, of which 33% is vacant. The company's woes result from a combination of reduced U.S. office leasing, increased operating costs and high interest rates, it said in the filing.
As a result, Hertz Properties and its parent company have had difficulty holding onto properties in the past year. All told, Hertz Investment Group has lost control of 11 properties, including two Hertz Properties disclosed it lost in its latest filing.
The company hired Amir Giryes, founder of Giryes Capital Group, to take charge of its restructuring, according to a separate filing. The role will last for two months with options to extend.
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