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Return to Lender: Week of March 21, 2024
- A federal bankruptcy court judge has issued a ruling effectively clearing the way for the Holiday Inn Express in Washington, DC’s Mount Vernon Triangle to be sold at auction, the Washington Business Journal reported. The ruling came more than a month after a last-minute involuntary bankruptcy petition forced a halt to an auction by Alex Cooper Auctioneers on the 247-key hotel at 317 K St. NW. Judge Elizabeth Gunn noted that Birchington LLC, the hotel’s developer, had fallen behind on payments to multiple creditors, including its largest secured creditor, SSHCOF II Washington DC, LLC; it now owes more than $83 million and has no clear path toward restructuring its debts and finding firmer financial footing as a going concern.
- 65 Broadway in Lower Manhattan ($151.5 million | CF 2019-CF1, MSC 2019-H6) was transferred to special servicing this month ahead of the loan’s April 2024 maturity, reported Morningstar Credit. The New York office’s occupancy has been on a steady decline, last reported at 67% in September 2023, down from 75% in December 2022 and 99% at issuance. As a result of weak occupancy and revenue, the 2022 net cash flow was 15% below issuance, pushing the DSCR to just 1.02x. In addition to the two pari passu senior notes, there is a $96-million subordinate note held in CF 2019-CF1.
- Princeton Pike Corporate Center ($129.0 million | MSBAM 2016-C28, MSC 2016-UB9, BACM 2016-UB10, MSBAM 2016-C29) has transferred to the special servicer for monetary default, according to March remittance data. Morningstar Credit said the eight-building, 809,458-square foot office campus in Lawrenceville, NJ, near Princeton, had been beset by declining occupancy since 2020; it fell to 60% as of last September. Through September, net cash flow for 2023 was on pace to be 34% below underwritten.
- Westbrook Partners was recently served a notice of default for a $72.5-million loan tied to 222 Sansome St., the home of the Four Seasons San Francisco at the Embarcadero, reported the San Francisco Business Times. Westbrook, which acquired the 155-key hotel property in 2019 for $126.6 million, or about $816,000 per room, is behind more than $3.15 million in payments on the loan. The Florida-based developer has not made its monthly payment on its loan since December, per the notice, which states that Westbrook has 90 days to become current on its loan.
- A vacant former Sears at the Lloyd Center mall in Portland, OR is up for sale following a bankruptcy filing, according to Oregon Live. An affiliate of Cypress Equities, the Texas company that owned the mall until late 2021 and still owns the Sears store, hired Hilco Real Estate to sell the nearly 143,000-square-foot property. The affiliate filed for Chapter 11 bankruptcy protection in December with more than $10 million in liabilities. Hilco Real Estate, hired to sell the four-story anchor store on the eastern side of the mall at 1260 N.E. Lloyd Center, is soliciting bids for an April 17 deadline. Bidders must prequalify in order to participate in an online auction on April 24.
- The owner of the 121,000-square-foot office portion at the Harbourside North at 2900 K St. NW in Washington filed for Chapter 11 bankruptcy Tuesday, reported the Washington Business Journal. The latest twist in a troubled saga dating to 2017, the filing doesn’t include the residential condominium portion of the development on the sixth floor. The bankruptcy documents, prepared by the Virginia office of Venable LLP, show the largest creditor is an affiliate of Allegiance Investment Advisors LLC, which is owed nearly $1.9 million related to a ground lease on the property. Almost $700,000 in real estate taxes are owed to the District government.
- A Cobb County office complex whose mortgage expired last year has been refinanced, in a positive sign for landlords seeking new debt in the troubled sector, the Atlanta Business Chronicle reported. Wildwood Center, a circa-1980s office building in the Cumberland area, secured a $65-million loan which matures in March 2029, according to real estate research firm Databank Inc. An affiliate of New York-based real estate investment trust Franklin BSP Realty Trust Inc. provided the loan. Last year, Wildwood Center was added to a CMBS loan-servicer watchlist. The nearly 700,000-square-foot property is about a mile and a half from Truist Park, home of the Atlanta Braves.
- ◦Sale/Acquisition
- ◦Financing
