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Return to Lender: Week of Feb. 22, 2024
- A foreclosed apartment complex in Brighton Beach, Brooklyn, has been sold to Manhattan-based Madison Realty Capital (MRC), reported the New York Business Journal. MRC acquired the 41-unit property at 3052 Brighton 1st St. for $24 million. For about 12 years, Brooklyn-based real estate developer Chaim Miller had owned the property through 3052 Brighton First LLC, which sold the property as part of bankruptcy procedures.
- One of the office buildings that comprises the Portals complex in Southwest Washington, DC is scheduled for an upcoming foreclosure sale, according to the Washington Business Journal. Acore Capital Mortgage LP filed a foreclosure notice on the 510,000-square-foot Portals III on Feb. 15. The building, at 1201 Maryland Ave. SW, received a $177-million loan in September 2019 and there’s a balance of $155.7 million on the note. Boston-based MetLife Investment Management received the notice on behalf of the building’s owners, an affiliate of DC-based Republic Properties Corp. and Seoul-based Samsung SRA Asset Management Co. Ltd. The auction is scheduled for 2 p.m. March 19 at Harvey West Auctioneers in DC.
- The J.K. Gill Building, an historic downtown Portland, OR office building which had its foreclosure auction last November, is now being marketed for sale by CBRE, the Portland Business Journal reported. The former J.K. Gill owner, Seattle-based Urban Renaissance Group, had taken out a loan from First Interstate Bank but defaulted on the debt, leading to last year’s foreclosure. The property is 100% vacant, according to CBRE.
- Morningstar reported that the GGP 3PCK Portfolio ($251.3 million | GSMS 2018-3PCK) has again moved to special servicing. The loan, backed by regional malls in Minnesota, South Carolina and Alabama, had previously been modified and paid down by $20 million, the modification extending the loan’s maturity to March 2024 with an additional six-month extension option available. Although the servicer commentary doesn’t cite a reason for the transfer, the second extension option was subject to conditions including a new rate cap being in place and a 17.5% debt yield hurdle, which the loan would not meet based on year-end 2023 net cash flow.
- Shorenstein Properties is in talks with a special servicer to renegotiate the terms of its $188-million mortgage on 1700 Market St., which came due last week. The Philadelphia Business Journal reported that Shorenstein requested that the loan on the 32-story Center City Philadelphia office property, which is held by investors in a CMBS trust, be transferred to special servicing to “engage in loan modification discussions,” according to servicer notes. Shorenstein submitted a modification proposal in December, and settlement discussions were ongoing as of the most recent loan report on Jan. 15. The property is currently 75% occupied, down from 88% when the loan was underwritten.
- The Miami International Mall ($159 million | JPMBB 2014-C18 & JPMBB 2014-C21 | CMBX.8) was transferred to the special servicer as of the February remittance, the same month the loan was set to mature, reported Morningstar. The transfer and inability to payoff appear to be tied to flagging occupancy, reported at 78% in late 2023. Net cash flow is on pace to exceed the past two years, yet still lags issuance and there is significant lease rollover in the next 12 months. The loan makes up 26.5% of the C18 deal and 7.7% of the C21 deal.
- Peachtree Center ($115.3 million | JPMCC 2018-PTC) was reappraised for $155 million this month, a 19% decrease from its $192.4-million appraised value in July 2022, reported Morningstar. The Atlanta office property has been REO since September 2022 after years of below-market occupancy, notably due to the departure of its largest tenant, Truist Bank, in 2021. Truist contributed roughly 21% of the underwritten rent and 13% of the GLA, and the majority of the space remains vacant.
- A second significant office building in downtown Pittsburgh is starting off the new year facing foreclosure, according to the Pittsburgh Business Journal. With the Grant Building already facing possible foreclosure from a Delaware bank, K&L Gates Center, which ranks as downtown’s 12th-largest office building at more than 629,000 square feet, is also facing a new foreclosure action. Court filings show that lender Pacific Life claims a debt balance of $59.1 million based on a 2012 mortgage of $78 million, which court documents indicate went into default on Dec. 1. In a complaint filed Dec. 21, Pacific Life indicated it could sell the building.
- 2 Executive ($54.5 million | 6.4% of BBCMS 2023-C19) has transferred to special servicing for term default, according to Morningstar The office/multifamily property in Fort Lee, NJ was securitized in 2023, but several issues have arisen since issuance. Servicer comments show that the insurance documents were not properly submitted following a fire, the required repairs haven’t been addressed and there are discrepancies with the financial reporting. Although financials have not been reported since issuance, the September 2023 OSAR reported an NOI down 43% from underwriting.
- Lenox Park, an office property in Memphis ($22.2 million | 2.7% of WFCM 2019-C52), transferred to special servicing in January for monetary term default. Morningstar reported that the borrower requested a discounted payoff and the special servicer is evaluating the proposal. The 391,282-square-foot office property is 34% occupied and reported a -0.15x DRCR in September 2023.
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