Recent distress activity across multiple U.S. markets underscores how lenders, special servicers and new capital are reshaping outcomes for challenged office and hospitality assets. In San Francisco, Flynn Properties completed its acquisition of 225 Bush by purchasing a $350 million note for $221 million and immediately taking title via a deed-in-lieu of foreclosure, according to Morningstar Credit citing the San Francisco Business Times. Despite a sizable loss relative to the original loan, Morningstar noted that accretive leasing and improving demand in the upper tier of the city’s office segment helped lift the property’s appraised value from $153 million in May 2025 to support the transaction. The deed-in-lieu marks the third time Flynn has assumed ownership of the building.
In St. Louis, the CMBS loan on Bank of America Plaza, a 760,000-square-foot office property in the CBD, was liquidated in August 2026. Morningstar Credit reported that the $42.8 million loan, part of GSMS 2015-GC30, generated a $39.1 million loss. The property had been in special servicing since May 2023 and became REO in July 2025, with the loss largely allocated to the Class G tranche and $1.2 million hitting Class F.
Distress is also reshaping ownership in Baltimore’s Mt. Vernon neighborhood. The Baltimore Business Journal reported that a private investor is acquiring two sets of former Brandon Chasen-owned properties on St. Paul Street for a combined $3.2 million. The buildings, sold in two $1.6 million transactions at a foreclosure auction organized by Alex Cooper Auctioneers, were the only assets to trade out of a broader eight-building multifamily and office portfolio offered at the sale. The winning bidder was a representative of Centinela Property Management LLC, acting for an undisclosed buyer.
Additional workouts are unfolding in San Francisco and Denver. The San Francisco Business Times reported that Rialto Capital has taken ownership of 580 Market St., a century-old, 35,000-square-foot building located above the Montgomery BART station, and is evaluating whether to stabilize it with new tenants or sell. In Denver, Malman Real Estate and two partners are under contract to acquire The Symes Building, a 98,577-square-foot downtown office property, for $2.7 million, the Denver Business Journal reported. A prior, city-funded residential conversion concept was abandoned after the asset went into foreclosure, and lender Thorofare Capital took control through foreclosure in February.
In Washington, D.C., a large Brutalist office building at 450 Fifth St. NW, slated for conversion into 500 residential units, may be headed to a foreclosure auction. The Washington Business Journal reported that an affiliate of noteholder Criterion Real Estate Capital has filed a foreclosure notice, stating that owner Judiciary Plaza LLC owes $166.6 million on a $177.5 million note originated in 2007. The 539,478-square-foot building is scheduled for an October 28 foreclosure auction at the D.C. office of Alex Cooper Auctioneers.
Meanwhile, a prolonged hotel receivership in downtown St. Louis is nearing resolution. The St. Louis Business Journal reported that the St. Louis Circuit Court has approved Midas Hospitality’s motion to conclude its receivership of the 88-key Hotel Indigo at 501 Olive St. following a July sale. Miami-based La Salle Gateway Partners acquired the property for $2.3 million and assumed responsibility for the remaining PACE loan, with the building carrying an appraised value above $6.1 million.
