Multiple distressed assets across the country are moving through foreclosure, bankruptcy, and special servicing processes as lenders and borrowers work through maturing and underperforming loans. A group of single-family homes and a separate multifamily and office portfolio once controlled by entities tied to Baltimore developer Brandon Chasen are scheduled for foreclosure auctions later this month, according to reporting cited from the Baltimore Business Journal. Three single-family homes in Fallston are expected to be auctioned on Sept. 17 on the steps of the Harford County Circuit Court building through Alex Cooper Auctioneers. On Sept. 30, seven multifamily and office properties totaling more than 100 units in the Mt. Vernon and Midtown-Belvedere neighborhoods are slated to be auctioned individually in foreclosure at the Clarence M. Mitchell Courthouse downtown. These sales follow a broader disposition of properties formerly owned by Chasen and the now-defunct Chasen Cos. after the developer encountered financial difficulties about two years ago, with several prior offerings drawing no bids and reverting to lenders.
In a separate bankruptcy-driven situation reported by the Boston Business Journal, a 203-key hotel and attached office and meeting space in Southbridge, MA is headed to auction. The Wellsworth Hotel, located roughly a half-hour southwest of Worcester, is scheduled for an Oct. 7 auction conducted by Paul E. Saperstein Co. The planned sale stems from a bankruptcy filing last year by Chip Norton, owner and president of Franklin Realty Advisors, and the Wellsworth appears to be the only property moving to auction so far as part of that process.
Several large loans have also transferred to special servicing, primarily within the CMBS market. A $420 million CMBS loan (DBGS 2021-W52) backed by an 893,000-square-foot office tower at 51 W. 52nd St. at the corner of West 52nd Street and 6th Avenue in New York has moved to special servicing ahead of its October 2026 maturity date, even though one remaining 12-month extension option is available. Morningstar Credit noted that the transfer was initiated to implement a previously negotiated modification and extension, and it expects the loan to return to the master servicer in the near term.
Morningstar Credit also reported that the $209 million Apple Sunnyvale loan (NCMS 2021-APPL) has gone to special servicing after missing its August 2026 maturity date. The collateral is a 350,000-square-foot office complex in Sunnyvale, CA, consisting of three buildings all fully occupied by Apple under leases expiring in July 2030. Additionally, a $200 million loan backed by 8 Times Square and 1460 Broadway (CD 2017-CD3, CD 2016-CD2, and CGCMT 2016-P6, referenced in CMBX.10) has transferred to special servicing ahead of a November 2026 maturity. The 214,000-square-foot property includes a Foot Locker retail store on the first three floors, with WeWork leasing the remaining space under a term running through 2034.
In the hospitality sector, the Hyatt Regency Jersey City loan has also encountered stress. Morningstar Credit reported that the $100 million CMBS loan (CGCMT 2016-P5 and CGCMT 2016-P6, also in CMBX.10), secured by a 351-key full-service hotel adjacent to the Exchange Place PATH station, moved to special servicing after the borrower indicated it would not be able to repay the loan at its October 2026 maturity date. The loan has underperformed relative to expectations, with 2016 cited as the only year in which net cash flow met underwritten levels.
