Macklowe might make it?

The Ground Floor reports:

The sale of the General Motors Building (in New York) continues with at least two bidders still in hunt; expected sale price will exceed $3 billion. Interestingly, the current first mortgage encumbering the building (approximately $2 billion) is not pre-payable, thereby causing the buyer to have to invest an unusually high percentage of cash (or sell some type of preferred equity position in the property).

I don't understand the last part of the analysis. You see non-pre-payable commercial loans all the time. The usual M.O. is to defease the property by substituting U.S. Treasuries for the mortgage payments. (If you want to know more about the fascinating topic of defeasance, I recommend going to the website of Commercial Defeasance, LLC. I did my first deal with them when they were just starting out and enjoyed working with them.)

Anyone out there working with non-defeasible products out there? Or could it be that the buyers want to try and assume the loan for whatever reason?

In any event, this could be very good news for Harry Macklowe.

UPDATE: the commentators have noted -- and perhaps quite correctly -- that Macklowe's financing could be in the lockout period. As I recall, under REMIC rules you cannot defease a property within two years of securitization. (I actually had a deal where someone tried to do it anyway. It was, in short, a mess.) This is another reason way you bring in people to help you with a possible defeasance from the get-go.