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**Market Roundup: Notable Foreclosures, Special Servicing Transfers, and Distressed Asset Sales**
**Phillips Lighting Office in New Jersey Liquidated at Total Loss**
Twenty years after origination, the Phillips Lighting loan ($27.6 million, WBCMT 2005-C21, CMBX.1) has been liquidated at a total loss. The Franklin Township, NJ office building, formerly occupied solely by Phillips Lighting, had been real estate owned (REO) since 2022 after Phillips vacated at the end of 2021. The loan was previously moved to special servicing, as reported by Morningstar Credit.
**Bloomington’s Tallest Office Tower Sells at 94% Discount**
The 8500 Tower, the tallest building in Normandale Lake Office Park in Bloomington, MN, has sold for $4 million — representing a drastic markdown. The Class A property, totaling 467,000 square feet, changed hands at roughly $8.50 per square foot. This is nearly a 94% drop from the price paid by an entity affiliated with Columbia Pacific Advisors during a foreclosure auction last year. The buyer group includes Great Neck, NY-based Namdar Realty, according to the Minneapolis/St. Paul Business Journal.
**Dream Hotel Site in Memphis Sold in Foreclosure Auction**
A proposed Dream Hotel site at 122 S. Main St. in Memphis has been sold in a foreclosure sale. Developer Intrator failed to follow through on the $99.3-million project. Staten Island-based JG Funding Corp., the former project lender, acquired the site for $2 million in a courthouse auction held on September 19. The transaction was recorded on September 30, according to the Memphis Business Journal.
**Historic Denver Shrine Property Headed for Auction**
The former Mosque of the El Jebel Shrine in downtown Denver may soon close a chapter of its storied history. A Denver District Court judge has approved plans for the property to be sold at auction, with a reserve price set around $9 million. Cordes & Company LLP, acting as court-appointed receiver since May 2023, can now proceed with the auction process, as reported by the Denver Business Journal.
**Foreclosure Suit Filed for Fort Lauderdale Industrial Property**
A 12,732-square-foot automotive warehouse in Fort Lauderdale is the subject of a $2.07 million foreclosure lawsuit filed by Newtek Bank. The action names Force Majeure I LLC as the borrower, alleging missed mortgage payments starting December 1, 2024. The lender is seeking repayment for the principal amount plus interest and legal fees, according to the South Florida Business Journal.
**Freehand Los Angeles Hotel in Default, Facing Foreclosure**
Ownership of the Freehand Los Angeles Hotel at 416 W. 8th Street has defaulted on $71 million in debt and now faces potential foreclosure. The borrower, affiliated with Generator Hostels, failed to meet its loan obligations to lender Trimont. Generator is owned by Queensgate Investments, a UK-based private equity firm that acquired the Freehand Hotels brand from Sydell Group in a $400 million deal six years ago.
**Fairways at Lowry Apartment Complex Moves to Special Servicing**
The $52.4 million loan for Fairways At Lowry — representing 18.5% of the FREMF 2021-KF101 deal — has been transferred to special servicing after missed payments in August and September. The 450-unit property, located in Aurora, CO, reportedly underwent an aggressive eviction strategy in early 2024 in an effort to improve tenancy rates. This approach resulted in lower occupancy and heightened turnover costs, according to Morningstar Credit.
**Detroit’s New Center One Office Loan Misses Maturity Payment**
The New Center One Building loan ($31 million, JPMBB 2015-C33 & JPMBB 2015-C32, CMBX.9) has transferred to special servicing following a missed balloon payment at its September maturity. Despite strong operations — with 2024 net cash flow 24% above the underwritten figure — the Detroit office asset was unable to pay off its debt. The property’s largest tenant, Henry Ford Medical Center, occupies 29% of the gross leasable area and has a lease term through 2027.
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