A boutique hotel with 119 rooms located in downtown Alpharetta, GA has been foreclosed upon and returned to its lender, according to the Atlanta Business Chronicle. The Hamilton, a part of Hilton’s upscale Curio Collection, was purchased by an affiliate of Peachtree Group for almost $42 million at the foreclosure sale on July 2. In late 2021, this same affiliate had issued a loan worth approximately $40 million to Mayfair Street Partners for development of the hotel. However, this loan was set to mature in January 2025.
Two office buildings in San Francisco at 222 Kearny St. and 180 Sutter St., which are tied to CMBS debt worth $47 million are also facing foreclosure proceedings as reported by the San Francisco Business Times . The current owners since 2019 – Gem Realty Capital from Chicago and Flynn Properties Inc from San Francisco – seem ready to walk away rather than continue paying interest on their loan from Goldman Sachs.
Aspiria Office Campus (valued at $232.5 million | JPMCC-2021-BOLT) located in Overland Park near Kansas City has been transferred into special servicing ahead of its maturity date in August of next year due it underperforming expectations since issuance back last year according Morningstar reports . With net cash flow down nearly seventy percent compared what was underwritten because revenue is weak while expenses have increased; occupancy is currently only sixty-six percent as T-Mobile downsized their space after issuance.
The securitized mortgage attached Fifth Ave ($200 Million | JPMBB-2014-C26 & CSAIL-2015-C1) moved into special servicing before October’s maturity date per Morningstar report , backed by seven hundred thousand square feet office building close Bryant Park Midtown Manhattan reporting DSCR above three times during twenty-three while maintaining eighty-five occupancy rate; however “This one will be interesting see how progresses with special servicer” as loan was only leveraged thirty-three percent based on appraisal issuance.
Queens Atrium ($164.4 million | JPMBB-2014-C22 & WFRBS-2014-C21) in Long Island City, New York has been transferred to the special servicer after failing to pay off at its July 2024 maturity date. The borrower requested an extension/modification last month for this office building backed CMBS loan that has performed well throughout its term, reporting a DSCR of 2.09x and full occupancy as of March according Morningstar .
The Marriott Midwest Portfolio (valued at $82.5 million | CGCMT-2016-P3 & CGCMT-2016-P4) is now being serviced by a second party per Morningstar report . This portfolio consists eight hotels located in Minneapolis and Detroit suburbs; originally modified/extended during pandemic when it reached initial maturity but now facing extended November 2021 due stagnant performance since modification causing DSCR from twenty-three fall below breakeven.
A single-story office building located in Long Beach California known as “444 West Ocean” ($25 Million | MSBAM – C34 ) was transferred into special servicing during July according Morningstar reports ; largest tenant made up just six point four percent GLA upon issuance which remains property’s biggest space today however numerous tenants have left resulting sixty-seven occupancy rate December twenty-three.
In summary, several properties across the country are facing foreclosure or have been returned to their lenders due to underperformance or failure to meet loan obligations. These include a boutique hotel in Georgia, two office buildings in San Francisco tied to CMBS debt, an office campus near Kansas City struggling with low occupancy rates and cash flow issues, an iconic Fifth Avenue property backed by securitized mortgage also experiencing challenges despite high occupancy rates initially reported at issuance time; another commercial real estate asset in New York City, the Queens Atrium, which has requested an extension/modification to its loan; and a portfolio of eight hotels in Midwest facing stagnant performance since initial modification during pandemic. Additionally, a single-story office building in California is also facing challenges with decreasing occupancy rates due to several tenants leaving.
