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Return to Lender: Week of Jan. 4, 2024
- An affiliate of New York-based Brookfield Properties has acquired $915 million in mortgages linked to more than 2,000 San Francisco apartments owned by Veritas Investments, reported the San Francisco Business Times. The transaction, which closed Dec. 28, could position Brookfield to take control of approximately 2,165 residential units across 76 apartment buildings. It’s not clear how much Brookfield paid for Veritas’ debt, which consists of a $674.8-million loan secured by 62 residential buildings and a second, approximately $130-million loan secured by 14 residential buildings. Veritas has been in default on the larger loan since November 2022 and defaulted on the smaller of the two loans last spring. Goldman Sachs originated both loans.
- The Dallas Morning News reported that a California-based investor has contracted to purchase two Richardson office properties out of bankruptcy. Houston-based Hartman SPE, which filed for bankruptcy last summer, has been selling its office and retail properties to focus on self-storage. The REIT now seeks bankruptcy court approval to sell the Central Park Business Center, an office campus in Richardson’s Telecom Corridor.
- Also in Dallas, New York-based Fortis Property Group LLC has defaulted on a portion of the debt backing Colonnade Center, a prominent office complex along the Dallas North Tollway in Addison. Fortis now faces a Feb. 1 deadline for a $223-million loan representing the biggest stack of debt on its nearly 1.1-million-square-foot property, reported the Dallas Business Journal. The complex’s three office buildings have faced declining occupancy and higher leasing costs. UBS AG originated the $223-million loan when Fortis refinanced in 2019. The loan was purchased that same year by a CMBS trust arranged by a UBS affiliate.
- The Colonie Center ($103.5MM | CGCC 2014-FL2) is headed back to special servicing, according to Morningstar Credit. The loan had previously been with the special servicer after failing to pay off at its maturity in 2019. It was eventually granted an extension through December 2023 and subsequently, the majority ownership interest in the Albany, NY regional shopping center was sold to what had been a minority owner of the property. The return to special servicing is a result of the borrower requesting another one-year maturity extension.
- The Watergate Office Building ($73.0MM | 5.0% of BMARK 2019-B14) has fallen delinquent, according to Morningstar Credit. The Washington, DC office building has seen its occupancy drop from 100% at year-end 2022 to 78% as of September 2023. The most recent servicer commentary notes that both the October and November payments were outstanding. A lockbox was activated in September 2023 for failure to meet a required 6.25% debt yield hurdle.
- The Hilton Garden Inn – Fort Washington ($15.1MM | CSAIL 2017-C8 | CMBX.11) in the Pennsylvania suburbs of Philadelphia was liquidated at a loss of $7.7 million to the trust after a lengthy stint in special servicing. Morningstar Credit had long monitored this property and the loss was in line with expectations.
- East West Bank is moving to take control of a North San Jose office building once fully leased to chipmaker Broadcom Inc., according to the Silicon Valley Business Journal. In a suit filed in San Francisco Superior Court, Pasadena, CA-based East West asked the court to initiate judicial foreclosure of 3100 N. First St. in San Jose and place the property into receivership, in an attempt to recover a $25-million loan it originated for property owner Vista Investment Group in 2018.
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