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Return to Lender: Week of Oct. 26, 2023
- Park Hotels & Resorts Inc. said Thursday that the trustee under the $725-million non-recourse CMBS loan, by and through its special servicer, filed a lawsuit over cessation of payments on the loan. In connection with the lawsuit, the trustee requested the appointment of a receiver to take control of the hotels securing the loan: the 1,921-key Hilton San Francisco Union Square and the 1,024-key Parc 55 San Francisco. The receiver will have the ability to market the hotels for sale and will have until Sept. 1, 2024 to complete the sale or sales.
- The site once envisioned as the 74-story Opus Place residential tower in Atlanta’s Midtown neighborhood is headed toward foreclosure, according to the Atlanta Business Chronicle. Olympia Heights Management secured a $40-million loan with Benmark Capital to refinance the property along 14th Street by the High Museum last August but has not paid off the debt, according to a Fulton County public notice. The four-acre site is set for a foreclosure auction Nov. 7.
- Blackstone is in negotiations with special servicer CWCapital to surrender four Club Quarters hotels in Chicago, Boston, Philadelphia and San Francisco after defaulting on a $274-million loan secured by the real estate portfolio. The goal is to secure a deed-in-lieu, according to the Philadelphia Business Journal.
- Two St. Louis office towers are on the distressed property rolls, the St. Louis Business Journal said in two separate reports. The former AT&T tower at 909 Chestnut St. in downtown St. Louis, the largest office building in the state of Missouri, is scheduled to go on the auction block next month, with a starting bid of $2.5 million. It will be offered at auction from Dec. 11 to 13, with CBRE handling the sale. The building was put into special servicing after sole tenant AT&T’s departure in 2017, and for years, a series of developers considered buying the property and then dropped the plans.
- Separately, the Business Journal reported that investors this month filed to force the 21-story 10 South Broadway Tower into receivership, asking a judge to appoint Gregg Williams of Trident Pacific Real Estate Group Inc. as receiver for the downtown St. Louis property. Wells Fargo Bank National Association is acting as trustee for the investors. The suit says the building’s owner, California-based Hertz Investment Group, failed to repay about $16.5 million that was due on a 2013 loan that matured on August 1 of this year.
- Morningstar reported that the Brass Professional Center ($55.8 million | BMARK 2020-B18, BMARK 2020-B19, DBJPM 2020-C9 | CMBX.14) in San Antonio, which moved to special servicing in June, has sold at auction. in the Newsflash when it moved to special servicing back in June. Special servicer LNR won the foreclosure sale. “We expect an REO designation in the near term and note the property has not yet been reappraised,” said Morningstar.
- Fashion Outlets of Niagara Falls ($86.2 million | 100% of COMM 2010-C1) is in the process of moving to special servicing, according to Morningstar. The loan had been previously modified after not paying off in 2020 and was granted a three-year extension to October 2023. The owner, Macerich, has been marketing the property for sale.
- 340 Bryant ($30.9 million | CFCR 2017-C8 & WFC 2017-RB1 | CMBX.11) saw its appraised value plummet from $52.0 million at issuance to $8.2 million, according to Morningstar. The San Francisco office property moved to special servicing in October 2022 after WeWork vacated and servicer commentary suggests the property should be REO shortly.
- Grant Building ($36.7 million | 3.5% of CGCMT 2017-P8 | CMBX.11) in Pittsburgh has moved to special servicing. The office property has maintained occupancy in the high-80% range, but cash flow fell below break-even as of this past June. “It’s possible that some lease rollover earlier in the loan term was backfilled at lower rental rates as revenue has dropped despite the steady occupancy,”: according to Morningstar.
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