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Return to Lender: Week of Jan. 18, 2024

  • The $308-million mortgage on 1740 Broadway, a Manhattan office tower owned by Blackstone Inc., is up for sale again after the private equity giant defaulted on the debt more than a year ago, reported Bloomberg News. Special servicer Midland Loan Services hired JLL to sell the loan, which is being marketed at roughly $150 million. With current occupancy at 7.4%, the property has been losing value since 2014, when the mortgage was originated and 1740 Broadway was appraised at $605 million, according to Bloomberg. 
  • Nightingale Properties and Wafra Capital Partners, te owners of Centre Square in Philadelphia, have negotiated with the city to reduce the property tax assessment on the troubled office complex by $113 million this year, reported the Philadelphia Business Journal. The two-building site remains in receivership amid sagging occupancy levels. Its assessed value, previously set at $362.6 million, will be revised for both the 2023 and 2024 tax years. The city’s Board of Revision of Taxes approved a 33% reduction in Centre Square’s property tax assessment to $250 million for 2024 and dropped the 2023 assessment 24% to $275 million. Centre Square was refinanced with a $368-million CMBS loan in December 2019, originated by JPMorgan Chase & Co. and serviced by Midland Loan Services before KeyBank was brought on as a special servicer. 
  • Portsmouth Square, Inc., the borrower of a $97-mortgage million loan guaranteed by the 544-key Hilton San Francisco Financial District hotel, defaulted when the loan reached maturity this month, according to the San Francisco Business Times. A Portsmouth subsidiary defaulted on two loans, including the $97-million mortgage loan tied to the hotel. The mortgage loan originated in 2013 from Bank of America and other institutional lenders. The loan was transferred into special servicing in October after Portsmouth indicated it would not be able to pay it off. Discussions with the borrower on a workout resolution are ongoing. 
  • The Hilton Cincinnati Netherland Plaza could be sold at sheriff’s auction, following a court ruling in favor of the hotel’s lenders, unless the owner pays back debt to its creditors. The Cincinnati Business Courier reported that the hotel’s owner, Greg Power, had defaulted on a $72-million loan and the plaintiffs were owed $84.9 million, plus daily interest, from April 1, 2023. Until documents are filed initiating the sheriff’s sale, Power has the ability to work out an agreement with the lenders that could avoid a sale. The downtown hotel is currently open and operating under a court-appointed receiver. 
  • 30 Knightsbridge Road, backed by a $51.3-million loan representing 5.27% of COMM 2014-UBS4 | CMBX.8, has moved to special servicing for imminent default, Morningstar reported. The loan had performed for the entirety of its term, but a sudden drop to 73% occupancy as of September 2023 precipitated the transfer. The second- and third-largest tenants show September 2023 lease expirations, so one or both have likely vacated. The 686,000-square-foot office building in Piscataway, NJ backs a loan that is due to mature in July 2024. 
  • GVA, one of the nation’s biggest apartment landlords, is facing mounting difficulties involving its properties in San Antonio, reported the Austin Business Journal. Austin-based GVA, which has 30,000 doors in its portfolio, suffered loan delinquencies across several San Antonio properties, leading to defaults and foreclosures as well as triggering steps to bring its finances back into order. GVA failed to make its November and December mortgage obligations for Bella Madera in San Antonio’s Shavano Park. That led servicer Midland Loan Services to file delinquency. The current loan being serviced by Midland was originated by CBRE Capital Markets in 2021 as part of a refinance and is valued at $36.5 million. 
  • David Bryce gave up ownership of the Troy Atrium downtown, the historic Frear Building and the large vacant lot where the Uncle Sam Parking Garage stood for decades. Ownership of the three Troy, NY properties was transferred to BLC Cos., a private, non-bank lender in Irvine, CA, reported the Albany Business Journal. The ownership change was done through a deed-in-lieu-of-foreclosure in which Bryce voluntarily handed over control of the properties as of Jan. 1 to be relieved of the debt that was owed. 
  • A prime property where housing has been proposed could be auctioned off within weeks, even though the site — located near San Jose’s two mega malls — landed a new owner last fall, the Mercury News reported. Santa Cruz County Bank warns it might attempt to auction off the property or seize the site through a foreclosure proceeding, because a $3-million loan the bank provided for the property in 2020 has tumbled into default and delinquency. Last October, a Fremont, CA-based investment group paid $4.8 million to buy the property from a group led by San Jose-based real estate investor Fred Mayer, which took out the defaulted loan in 2019. The property is across the street from Santana Row, a destination mixed-used restaurant, retail, office, housing, hotel and entertainment center. 
Read More News Stories About: CBRE, JLL

Inside The Story

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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