• Lender Arden Group won a Uniform Commercial Code foreclosure auction for the Margaritaville Resort Times Square Hotel as the sole bidder, according to published reports. The auction occurred three months after the property’s owner, Sharif El-Gamal’s Soho Properties, filed for Chapter 11 bankruptcy protection. Arden Group used existing debt for its bid of $1,000 to acquire an equity stake in the hotel. Soho Properties defaulted on the 234-key hotel at 560 Seventh Ave. in March after missing a debt service payment on a $57-million loan originated by Arden Group in July 2021. Newmark‘s Dustin Stolly, Jordan Roeshlaub, Adam Spies, Adam Etra and Brock Cannon brokered the auction, previously scheduled for July but postponed because of Soho’s bankruptcy filing. Soho Properties sought to refinance about $309 million of total debt connected with the project. 

• The Dallas Morning News reported that lenders holding millions of dollars in debt on a Dallas office tower are taking steps to foreclose. Houston-based Whitestone Uptown Tower LLC, which owns the Uptown Tower at 4144 North Central Expressway, last month disclosed that it had been notified that the high-rise was in default on more than $14 million in debt. The loan was due on Oct. 1. Now the mortgage holders have appointed a trustee authorized to undertake a foreclosure of the property, previously known as Amberton Tower.

• Fortress Investment Group acquired the Bushwick Generator site at 215 Moore St. in Brooklyn for $25.5 million, according to Crain’s New York Business. The ownership transfer stemmed from a foreclosure process Fortress initiated against Toby Moskovits’ Heritage Equity Partners in 2019. Fortress had acquired the construction loan on the property, intended to house an incubator hub, from Axos Bank in 2019.   

• A $50-million mortgage anchored by the seven-story One Union Square building in San Francisco, with high-end retail brands such as Bulgari, Moncler and Lacoste as well as office tenant WeWork, is heading to special servicing after defaulting on its Oct. 6 maturity, the San Francisco Business Times reported The 2013 interest-only loan from Citigroup Inc. provided financing to General Growth Properties and Ashkenazy Acquisitions Corp. for the joint venture’s record-breaking $110-million acquisition of the 42,256-square-foot mixed-use building at 212 Stockton St., also known as the Bulgari building. The loan has been on an industry watchlist since April. It was transferred to special servicing with LNR Partners LLC as the special servicer following the balloon payment maturity default. Wells Fargo is listed as the loan’s master servicer. 

• CIM Group and Australian pension fund QSuper will hand over the keys to 1440 Broadway in Midtown Manhattan, published reports say. A $399-million CMBS loan backed by the office tower, which CIM and QSuper acquired in 2017, went to special servicing earlier this month. The property was valued at $540 million in 2021 when the loan was made. 

• Morningstar reported that a July 2023 appraisal reduced the value on 315 W, 36th St in Manhattan (COMM 2018-COR3 & BMARK 2018-B3 | CMBX.12) to $42.4 million from $127.0 million at issuance. The collateral is a 142,762-square-foot office in Manhattan. WeWork, which occupied 93% of the GLA on two leases through 2031 and 2032, has vacated and stopped paying rent. 

• In Houston, the $42.5-million loan backing an office building at One Westchase Center (JPMCC 2017-FL11) was scheduled to mature this month but has instead transferred to the special servicer, according to Morningstar. The servicer comments originally stated that payoff was expected at maturity, but comments now point to a maturity extension. The loan was previously specially serviced before being acquired by Nitya Capital in 2020. The collateral is a 466,159-square-foot office in Houston’s Westchase District, which is about 15 miles west of the CBD. 

• Fitch Ratings has downgraded 10 classes and affirmed eight classes of CSAIL 2017-CX9 Commercial Mortgage Trust, commercial mortgage pass-through certificates, series 2017-CX9 (CSAIL 2017-CX9). The downgraded classes were assigned a Negative Rating Outlook. The downgrades and Negative Outlooks primarily reflect the impact of the criteria due to the concentrated pool nature of the remaining pool. There are only 24 loans remaining, of which 65% are secured by office properties, many of which are underperforming. 

Hear from the leaders in loan advisory and special servicing during a panel on distressed assets at Connect Investment & Finance 2023 on Oct. 24 at the Hyatt Regency O’Hare in Rosemont, IL. For up-to-the-minute insights on the state of the market and what’s next in the current cycle, be sure to attend. Click here to register.