**Return to Lender: Week of September 18, 2025**
– The *Memphis Business Journal* reports that six multifamily properties in Memphis have changed hands through a foreclosure sale. An LLC affiliated with Arbor Realty Trust of Uniondale, NY acquired the properties, totaling 1,240 units, after the original borrower, Texas-based KeyCity Capital, defaulted on a loan. Arbor originally financed the $84.33 million purchase in 2021, and the same properties were recently acquired by Arbor’s affiliate, Memphis 6 Port PO LLC, for $42.27 million at auction.
– The Luzzatto Company, a developer known for acquiring distressed assets, has purchased the Denver Energy Center at auction for $5.25 million. The nearly 900,000-square-foot office complex previously sold for $176 million in 2013 and later went to JPMorgan Chase in a 2022 foreclosure sale for $88.2 million. As reported by the *Denver Business Journal*, Asher Luzzatto is considering converting at least one of the towers to residential use, aligned with the firm’s other adaptive reuse projects in Denver.
– A foreclosure auction is scheduled for a behavioral health hospital property in West Palm Beach following a $10.64 million judgment. According to the *South Florida Business Journal*, a Palm Beach County judge awarded the judgment to East West Bank against Sunshine Holdings 2019 LLC and affiliated entities. The auction, set for November 17, will include a 50,154-square-foot hospital on 45th Street and an 8,006-square-foot medical office building on East Avenue.
– More than two years after WeWork Capital Advisors defaulted on a $240 million loan secured by 600 California Street in San Francisco, the property is being brought to market by a court-appointed receiver. The *San Francisco Business Times* notes that Trigild, the receiver, has engaged Newmark to sell the 359,880-square-foot office building, with expected pricing in the mid-$120 million range — around $300 per square foot. The building was appraised at $124 million earlier this year.
– Rialto Capital Advisors, acting as special servicer for a $104.5 million CMBS loan tied to a 139,921-square-foot office building at 90 Fifth Avenue in Midtown South, Manhattan, has enlisted Newmark to either sell the loan or the underlying property. Foreclosure proceedings have already commenced. Rialto is positioning the asset as a potential residential or alternative-use conversion opportunity, according to Trepp.
– Nearly 40 Banner’s Hallmark stores in Virginia have filed for Chapter 11 bankruptcy protection due to seasonal cash flow challenges. The *Kansas City Business Journal* reports that CEO Leonard Banner’s company, which operates 39 Hallmark Gold Crown Stores, is using bankruptcy to restructure leases and operations. The stores’ management entity, LBPO Management LLC based in Gaithersburg, Maryland, also filed for Chapter 11 protection.
– The $425 million CMBS loan linked to the 1.2-million-square-foot office tower at 32 Avenue of the Americas in Manhattan has been transferred to special servicing, per Morningstar Credit. The property, located in the Hudson Square/Tribeca submarket, remains 57% occupied post-pandemic, with cash flow and occupancy continuing to deteriorate even though the loan had previously remained current.
These property developments reflect ongoing volatility in commercial real estate markets, especially in office and multifamily sectors, as ownership structures adjust to changing financial realities.
