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Tom Barrack’s Colony Capital defaults on billions

Tom Barrack (Credit: Financial Times)

Tom Barrack’s Colony Capital has defaulted on $3.2 billion of debt secured by hotels and healthcare-related properties, according to the Financial Times. News of the defaults came in a regulatory filing in which it said it had also suspended its dividend and tapped $600 million from a revolving credit facility “as a precaution to ensure funds are available”.

  • Non-recourse debt: The defaults occurred within a portfolio of 157 “hospitality properties” and 357 nursing homes, assisted living centers and other healthcare-related properties, which accounted for nearly three-quarters of the real estate on Colony’s balance sheet before the crisis struck, FT noted.
  • Be Smart: This explains Barrack’s position two weeks ago that the U.S. property market is in “chaos” and on the verge of collapse. His proposal for an orchestrated forbearance, a “time out” in which any payments could be accrued onto leases and loans clearly reflected the reality of his portfolio.

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