**Return to Lender: Week of Sept. 18, 2025**
Here’s a roundup of notable foreclosure, loan default, and distressed property transactions reported over the past week:
– The *Memphis Business Journal* reported that an LLC affiliated with Uniondale, NY-based Arbor Realty Trust has acquired six Memphis properties through a foreclosure sale. Arbor originally financed Texas-based KeyCity Capital’s acquisition of the multifamily portfolio in 2021, providing a combined $84.33 million in loans. The properties, totaling 1,240 units, went into default and were auctioned off. In September, Arbor-affiliated entity Memphis 6 Port PO LLC purchased the assets at auction for $42.27 million.
– The Luzzatto Co., a developer with a recent track record of acquiring distressed assets, has secured the Denver Energy Center at auction for $5.25 million. The two-tower, nearly 900,000-square-foot office complex previously sold for $176 million in 2013 and $88.2 million in a 2022 foreclosure auction by JPMorgan Chase. Asher Luzzatto indicated plans to potentially convert one of the towers to residential use, aligning with the company’s recent activity in the Denver market.
– A behavioral health hospital property in West Palm Beach is scheduled for auction following a $10.64-million foreclosure judgment, according to the *South Florida Business Journal*. The ruling, granted by a Palm Beach County Circuit Court judge, affects Sunshine Holdings 2019 LLC and affiliated entities. The 50,154-square-foot hospital at 1041 45th Street and an 8,006-square-foot medical office at 4802 East Avenue are planned for a court auction on November 17.
– In San Francisco, a court-appointed receiver is preparing to bring 600 California Street to market after WeWork Capital Advisors (WeCap) defaulted on a $240-million loan backed by the building. Trigild, the receiver, has hired Newmark to market the 359,880-square-foot office property. With pricing expected in the mid-$300 per square foot range, the property is projected to trade for around $120 million. It was appraised at $124 million earlier in 2024.
– Rialto Capital Advisors, the special servicer of a $104.5-million CMBS loan backed by the 139,921-square-foot office building at 90 Fifth Avenue in Midtown South, Manhattan, is offering either the loan or the property for sale. Foreclosure proceedings have already begun. Rialto is marketing the asset as a potential conversion opportunity, according to data from Trepp.
– The entities behind nearly 40 Banner’s Hallmark stores in Virginia have filed for Chapter 11 bankruptcy protection. Facing seasonal cash flow issues, the company, led by CEO Leonard Banner, is looking to reassess its lease portfolio. Banner operates 39 Hallmark Gold Crown stores located in malls and shopping centers throughout Virginia. The stores are managed by LBPO Management LLC, which also filed for bankruptcy.
– The $425.0 million CMBS loan against 32 Avenue of the Americas in Manhattan has been transferred to special servicing ahead of its November 2025 maturity. The 1.2-million-square-foot office tower, situated in the Hudson Square/Tribeca area, had performed consistently until recently. However, with cash flow and occupancy having dropped significantly—current occupancy stands at just 57%—the property is now under heightened scrutiny, according to Morningstar Credit.
These cases reflect a continued trend of real estate distress across various markets and sectors, including multifamily, office, healthcare, and retail.
