**Return to Lender: Week of June 19, 2025**
Several commercial real estate properties across the country are facing financial distress, with defaults, transfers to special servicing, and bankruptcy proceedings making headlines this week.
– **Seattle:** Martin Selig Real Estate has turned over nine office properties to custodial receiver Krista L. Freitag following financial challenges on a $345-million loan from Goldman Sachs, originated in March 2015. The properties backed the now-troubled debt, according to the Puget Sound Business Journal.
– **San Francisco:** Lenders are marketing nonperforming debt tied to 140 Second Street, a 34,000-square-foot downtown office property. The loan, with a current balance of $19.58 million, has been in arrears for nearly two years after the owner, TKG, stopped making consistent payments, reports the San Francisco Business Times.
– **Miami:** Keen-Summit Capital Partners LLC and Wilshire Advisory Group have been engaged to oversee the bankruptcy sale of a unique rooftop commercial condominium at Brickell House. The offering includes Commercial Units 8, 9, and 11 located at 1300 Brickell Bay Drive, which occupy the tower’s entire top floor.
– **New York City:** The $241-million securitized loan on 85 Broad Street has entered special servicing due to payment delinquencies. As of March 2025, occupancy dropped to 62% from 72% at the end of 2024 and 89% at issuance. The total debt outstanding—including $117.6 million in subordinate debt—now stands at $358.6 million. The loan matures in June 2027.
– **Austin:** Morningstar Credit reported that the Austin Multifamily Portfolio, totaling $110 million, has transferred to special servicing due to monetary default. Net cash flow is down 16% from original underwriting. The loan’s debt service coverage ratio is nearing breakeven at 1.02x. The assets include two garden-style multifamily properties located off I-35 in North Austin.
– **Washington, D.C.:** The D.C. Office Portfolio, valued at $103 million and comprising three Class B offices in the central business district, has been moved to special servicing due to an imminent monetary default. The portfolio has underperformed for several years, according to Morningstar Credit.
– **Baltimore:** The property at 100 East Pratt entered special servicing after anchor tenant T. Rowe Price vacated in April 2025. The tenant had leased 67% of the gross leasable area and used an early termination clause, which was initially set to expire in 2027. Before the move-out, the building had exceeded initial underwriting expectations.
These developments reflect continued stress in the commercial real estate sector across several major U.S. markets, as landlords face rising vacancies, refinancing difficulties, and shifting occupier demand.
