Lenders and special servicers advanced a series of foreclosure, bankruptcy and special servicing actions across several U.S. markets in the week of June 25, 2026, highlighting continued stress in office and retail-backed debt.
In downtown Oakland, the longtime home of the Clorox Co. at 1221 Broadway transferred to lender control. The San Francisco Business Times reported that Heitman Capital Management assumed ownership of the 535,000-square-foot office tower and a portion of the City Center mixed-use complex through a foreclosure filed with the Alameda County Assessor’s Office on June 16. The property was previously owned by private equity firm KKR and real estate developer TMG Partners, which acquired the tower in 2019 for $255.34 million, or roughly $490 per square foot. KKR obtained a $239.6 million loan from Heitman at the time of purchase. Under the new structure, TMG will remain in place as property and asset manager, with plans to reposition the building through upgrades and renovations to attract new tenants.
In downtown Miami, two office buildings are headed to auction following a foreclosure judgment of $65.7 million. According to the South Florida Business Journal, Miami-Dade County Circuit Court Judge Joseph Perkins entered a stipulated foreclosure judgment on June 11 in favor of Atlanta-based lender AFF IV 200 Miami LLC and against entities SRCTD 44-200 LLC and FS Equity Investments II LLC. The judgment is tied to a mortgage with $41.1 million in principal outstanding, plus interest and fees. The 12-story, 150,530-square-foot property at 200 S.E. First St. and the 25-story, 172,292-square-foot Courthouse Tower at 44 W. Flagler St. are scheduled for an online auction on July 20.
In West Virginia, Hilco Global Real Estate Practice and Onyx Asset Advisors set a July 6, 2026 bid deadline for the bankruptcy sale of two recently built, income-producing commercial assets near Morgantown. The portfolio within the West Ridge Development commercial hub includes a 43,287-square-foot, Class A multi-tenant office building at 3000 Swiss Pine Way and a fully occupied, six-store retail center totaling 136,865 square feet at 16-96 Colliers Crossing, which is anchored by nationally recognized retailers and located along I-79.
In downtown Denver, the owner of the former Mosque of the El Jebel Shrine has so far avoided another auction despite a September court ruling that the property should be sold to recover value for the lender. The Denver Business Journal reported that recent court filings show the owner and lender are pursuing a forbearance agreement that would resolve the bankruptcy and foreclosure process in a different manner. Owner Robert Lubin said he and his development team have been paying down the loan, which has encouraged the lender to negotiate.
Credit pressures are also evident in CMBS markets. Morningstar Credit reported that 425 Eye Street, a Washington, DC office building, transferred to special servicing for imminent monetary default. The $102.2 million CMBS loan (GSMS 2021-GSA3 and BMARK 2022-B32) is secured by a property with significant exposure to federal General Services Administration tenants, with most of that space — about 64% of the building — expiring this month. In the retail segment, Morningstar Credit noted that the Simon Premium Outlets CMBS loan, with a balance of $83.9 million across MSBAM 2016-C30, WFCM 2016-BNK1 and MSBAM 2016-C31 (CMBX.10), also transferred to special servicing after missing its June 2026 maturity date. The collateral comprises three outlet centers in tertiary markets in Massachusetts, South Carolina and Georgia, which had performed well before the pandemic but have not returned to prior cash flow levels; however, low original leverage has kept cash flow around breakeven, making an extension a likely outcome.
