Downtown Seattle's 76-story Columbia Center has won a reprieve from its lender, extending a defaulted $380 million loan and reducing monthly payments by nearly 40 percent.

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The owner of downtown Seattle’s 76-story Columbia Center has won a reprieve from its lender, six months after it defaulted on the huge loan it took out in 2007 to buy the landmark office tower.

Representatives of bondholders to whom Boston-based Beacon Capital Partners owes $380 million agreed to extend the interest-only loan by three years to 2015, according to a report filed Wednesday by the loan’s servicer.

That means Beacon’s monthly payments will drop by 38 percent, said Paul Mancuso, a vice president with Trepp, a New York firm that tracks and analyzes commercial mortgage-backed securities.

The modification, agreed to earlier this month, also gives Beacon two one-year loan-extension options. If both are exercised, Beacon wouldn’t be required to pay back the principal until 2017.

Beacon had faced a May 2012 deadline to make that balloon payment.

The workout is fairly typical of what’s going on with troubled commercial real-estate debt around the country, Mancusco said. Foreclosure never was a serious option for Beacon’s lenders, he added, and Beacon, despite its troubles, almost certainly wanted to keep the building.

“It’s a trophy building in a market with strong fundamentals,” he said.

Beacon declined to comment.

The 1.5-million-square-foot Columbia Center, the Northwest’s tallest building, was 89 percent leased when Beacon paid $621 million for it in April 2007, near the peak of the real-estate boom.

Now nearly 40 percent of the building is listed as “available” on online commercial real-estate database Officespace.com; one reason is Amazon, which leased 177,000 square feet in the tower and is consolidating at its new South Lake Union headquarters.

The overall vacancy rate in downtown Seattle is around 20 percent.

An appraisal earlier this year pegged the Columbia Center’s value at just $330 million, much less than Beacon owes on the building.

Beacon borrowed a total $480 million from Morgan Stanley Capital in 2007 to help pay for the tower.

The investment bank bundled $380 million of that debt with other real-estate loans into a $1.9 billion package and sold it to bondholders as commercial mortgage-backed securities.

The other $100 million slice of Beacon’s Columbia Center debt was sold to private investors.

Beacon stopped making payments on the $380 million in March. Monthly reports from Wells Fargo, the securities’ servicer, indicated that the tower no longer was generating enough income to cover Beacon’s debt payments.

In 2007, the building’s annual net operating income — revenue minus operating expenses — was estimated at $31.8 million, according to the reports. By 2009 that had dropped to $19.4 million.

The annual cost to service the debt: nearly $22 million.

The lower debt payments resulting from the loan extension should give Beacon some breathing room, Trepp’s Mancuso said.

The new deal also requires Beacon to put $30 million into a reserve account. Some of that probably will go to compensate bondholders for $10 million in missed payments since March, Mancusco added.

Before this month’s resolution, Trepp had identified the Columbia Center debt as the nation’s largest delinquent commercial mortgage-backed securities loan.

The Columbia Center was one of 14 Seattle-area office buildings Beacon bought in 2007, making the firm this market’s largest landlord.

Occupancy in the other buildings also has dropped, and reports indicate that, like the Columbia Center, the income they produce now falls short of what’s needed to service debt.

While Beacon has not defaulted on the loan it took out to finance the acquisition of those buildings, it is negotiating a possible modification with lenders.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com