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Return to Lender: Week of June 20, 2024
- The Washington Business Journal reported Thursday that the recently renovated office building at 1200 New Hampshire Ave. NW in Washington, DC has changed hands in a deed in lieu of foreclosure. Brookfield Properties took possession of the 290,835-square-foot building from an affiliate of GreenOak Real Estate Advisors. GreenOak purchased the building for $174.5 million in 2018 before its merger with Bentall Kennedy. Citibank issued a loan to GreenOak in 2018 for $123.8 million, and Brookfield became a B-piece bondholder when the loan was packed as CMBS. Brookfield waived roughly $52 million of the loan, resulting in a $70.8-million fee simple consideration in the deed in lieu of foreclosure.
- A 10-story office tower in Uptown Oakland was seized by its lender amid a nearly 70% drop in value from when it was purchased seven years ago, the San Francisco Business Times reported. The property at 1700 Broadway, a 31,500-square-foot Class B office building at the base of the 19th Street Oakland BART station entrance, is now owned by its lender Bank of the Sierra. The bank took ownership after no buyer emerged to purchase the office tower at a public auction, where the building was valued at $4 million. San Diego-based HP Investors purchased the building in 2017 for $13.3 million.
- Also in Oakland, newly formed real estate company Lakeside Group is in contract to buy a nonperforming loan tied to 180 Grand Ave., a 276,000-square-foot office tower near Lake Merritt, through a note sale, reported the San Francisco Business Times. A $95-million loan tied to the property hit the market in March, marketed by JLL. Harvest Properties purchased the building in 2017 with then-partner KKR for $119 million, and KKR later sold its stake in the building to AXA Investment Managers in 2019.
- Alex Cooper Auctioneers has canceled a planned foreclosure sale of the Waldorf Astoria Washington D.C. that was scheduled to be held Thursday, more than a month after the lender of the debt secured by the leasehold interest on the luxury hotel filed a notice of foreclosure with the DC Recorder of Deeds. The note had an outstanding balance of $252.7 million when the foreclosure notice was issued, reported the Washington Business Journal. The auction has been postponed to Aug. 5.
- Park Square, a 296,000-square-foot office property in Portland, OR, is scheduled to be offered at a foreclosure auction on Oct. 30, Trepp reported. The property, at 100 SW Market St., is encumbered by a $40.3-million loan that pays a 3.52% coupon and is set to mature in November 2026. It’s owned by an affiliate of PCCP LLC of Los Angeles, which acquired it in 2019 for $96.5 million. The property’s largest tenant, Regence BlueCross BlueShield, vacated its 187,115-square-foot space at the end of 2023.
- A prominent high-rise in the West Village neighborhood of Dallas’ Uptown has received a $15-million makeover but is also being threatened with foreclosure. Although Houston-based apartment developer Vero Sade has completed renovations to the 21-story, 381-unit building at 3700 McKinney Ave. that it calls 3700M, the property has been scheduled for a July 2 foreclosure auction. Vero Sade co-founder Dan Bassichis told the Dallas Business Journal, “We are deeply committed to maintaining our ownership of this property and have been working diligently with our lender over the course of several months to resolve this matter.”
- A foreclosure affidavit was recorded Monday with Washington, DC’s Recorder of Deeds for 1129 20th St. NW, a 176,017-square-foot, 10-story property known as the Liberty Building, the Washington Business Journal reported. The 38% vacant building’s owner is an affiliate of D.C.’s Monument Realty and Ares Management, a joint venture that acquired the property for $84.8 million in December 2020. An affiliate of note holder Principal Financial Services Inc. filed the affidavit. A predecessor issued the owner a $60.6-million loan in 2021. It’s not clear how much the JV owes on the note.
- The 30-story Bank of America Plaza, at 800 Market St. in downtown St. Louis, is being marketed for sale by CBRE, the building’s court-appointed receiver. The St. Louis Business Journal reported that the unpriced listing comes after the building’s owner, Los Angeles-based Positive Investments, defaulted in 2023 on its $50-million loan on the property, originally made by Citigroup. As part of litigation brought by U.S. Bank Trust Co. on behalf of debt holders, a state court judge in January approved the receivership.
- A single-asset, single-borrower loan on Hollywood & Highland ($263.8 million | NCMS 2019-FAME) has moved to special servicing in advance of its August 2024 maturity date, reported Morningstar Credit. The Hollywood Boulevard property backing the loan contains a mix of retail, event space, office, and a movie theater. The loan had not previously been delinquent during the life of the loan, although it did get a short-term forbearance during the pandemic. Since then, the property has fallen short of underwritten expectations with occupancy that has settled into the mid-70% range and net cash flow in 2023 that was 20.2% below underwritten levels.
- Morningstar Credit reported that Fairview Park Drive ($90.0 million | 16.2% of WFRBS 2014-C21 | CMBX.8) has moved to special servicing after failing to find financing ahead of its scheduled maturity in July. The loan, backed by a 361,000-square-foot office building in Falls Church, VA, had reported fairly strong financials at year-end 2023, with its 86% occupancy identical to underwritten and revenue exceeding the underwritten level, although net cash fell just short of underwriting.
- Gateway Center ($28.4 million | 4.2% of JPMCC 2019-COR5 | CMBX.13) transferred to the special servicer this month for imminent monetary default, according to Morningstar Credit. The Charlotte office property will lose its largest tenant, Bank of America, ahead of its September 2024 lease expiration. The tenant will vacate 242,820 square feet (78% of the GLA) of office space, reducing occupancy to around 9%.
- ◦Sale/Acquisition
- ◦Financing
