Distress remains elevated across U.S. commercial real estate, with lenders and special servicers taking control of assets or moving more loans into workouts and foreclosure proceedings.
In Atlanta, a New Jersey-based investment firm has lost control of another multifamily property. Liquid Capital Real Estate Investments is no longer the owner of Crest on Peachtree, a 534-unit apartment tower at 710 Peachtree St. in Midtown. The loss follows the 2024 foreclosure of The Optimist Lofts in Piedmont Heights, less than two years after Liquid Capital acquired that asset. An affiliate of New York-based Arbor Realty Trust had provided a $90.8 million loan in August 2022 to finance Liquid Capital’s $107.5 million purchase of Crest on Peachtree. After the loan defaulted, foreclosure proceedings were initiated last month, and an Arbor affiliate ultimately prevailed at the foreclosure auction with an $85.9 million credit bid.
Office distress continues to build in several major metros. In Bellevue, WA, Morningstar Credit reported that Bravern Office Commons, a 750,000-square-foot office complex securing a $304 million CMBS loan, is under contract with closing expected later this year. According to the Puget Sound Business Journal, price talk has centered around $262.5 million, though most bids were reportedly below that level. The loan transferred to special servicing in September 2025 after cash flow weakened following the departure of Microsoft, and the buildings remain vacant.
In St. Louis Park, MN, CommunityAmerica Federal Credit Union plans to auction two Metropoint business park office buildings in September to recover roughly $46 million in loans. The foreclosure push follows lawsuits filed in Hennepin County District Court against the owners of the Metropoint 300 and Metropoint 400 buildings at 300 and 400 Highway 169 S.
Trepp reported that CWCapital Asset Management has retained Colliers to market Fourth & Blanchard, a 410,000-square-foot, 51% occupied office building at 2101 Fourth Ave. in Seattle, for a planned sale at about $29 million. CWCapital is the special servicer on a former $233.13 million CMBS loan that covered this asset and six other Seattle properties owned by Martin Selig Real Estate. The loan trusts took title to the collateral portfolio via foreclosure last August. A separate Martin Selig-owned portfolio of nine buildings totaling 1.64 million square feet secures a $379.1 million CMBS loan that is also troubled; Morningstar Credit reported the portfolio was recently reappraised at $341.2 million, down 37.3% from a 2015 valuation of $544.5 million, with occupancy at 63%.
In Boca Raton, the partially completed Mandarin Oriental Residences faces a $417.7 million foreclosure lawsuit, according to the South Florida Business Journal. Via Mizner Lender 1 LLC, acting as agent for several lenders including Athene Annuity and Life Co. and Athora Lux Invest NL-CRE Direct Lending Fund, filed suit on July 17 against Via Mizner Owner III LLC, the project’s developer. The action also names multiple contractors with construction liens and numerous presale condo buyers, some of whom have filed their own lawsuits.
The San Francisco Bay Area is seeing a cluster of high-profile office and retail distress. The San Francisco Business Times reported that lenders served CIM Group a default notice on a $97.1 million loan secured by 1 Kaiser Plaza in Oakland, after the loan matured on July 1. Morningstar Credit pegged the building’s current value at $53.5 million, compared with $212 million when the loan was originated in 2016, and CIM said in SEC filings that it is working with its lender and special servicer on a long-term solution or extension.
Separately, a San Francisco Superior Court judge placed the historic Central Tower, a two-building office property at 703 Market St. and 30 Third St., into receivership at the end of May, according to the San Francisco Business Times. Lenders allege that CIM Group, which has owned the asset since 2013, stopped making timely payments on its $98 million loan in September 2025 and has remained delinquent, though no formal notice of default has yet been filed.
Union Square retail is also under pressure. The San Francisco Business Times reported that lenders have issued a notice of default to New York-based Ashkenazy Acquisitions Corp. on a $40 million loan tied to One Grant, the landmark Savings Union Bank building, and 156 Geary, currently occupied by Chanel. Public records show that a $30 million loan originated in 2013 was later transferred to Ashkenazy and modified to $40 million in 2015, and the debt was not repaid at maturity.
Regional malls continue to show stress in CMBS pools. Morningstar Credit reported that the $84.8 million loan on Westfield Belden Village in Canton, OH, which represents 100% of the MSC 2011-C3 deal, has returned to special servicing after missing its extended July 2026 maturity date. The debt is secured by 419,400 square feet of an 827,000-square-foot regional mall; net cash flow has failed to meet underwritten levels since 2015. In Las Vegas, the $100.4 million Meadows Mall CMBS loan, backed by 308,000 square feet of inline space at a 945,000-square-foot super-regional mall, has also transferred to special servicing ahead of its July 2026 maturity. The loan, in CMBX.7, was previously modified and extended from a 2023 maturity, but cash flows in 2024 and 2025 were the lowest in its history, and the borrower is reportedly seeking another modification.
Finally, Morningstar Credit noted that the $38 million Brooklyn Multifamily Portfolio loan, secured by five apartment buildings totaling 78 units in Brooklyn, has gone to special servicing after several months of delinquency. The reason for the default is unclear, as the properties have historically generated enough cash flow to cover debt service.
