**Return to Lender: Week of September 25, 2025**
A roundup of notable distressed commercial real estate activity and foreclosures across the U.S. for the week ending September 25, 2025:
– A Kohl’s store in Westerville, Ohio, has been transferred to Florida-based Rialto for $7.5 million via sheriff’s sale. The property entered foreclosure after the previous owner, SPMC 1 LLC, defaulted on a loan held by Deutsche Bank Trust Company Americas, which appointed Rialto as the special servicer.
– The Cupples 9 office building in downtown St. Louis was purchased out of foreclosure by Kawa Capital, an asset management firm based in Hallandale Beach, Florida. The building, located at 900 Spruce St., had an appraised value of $5.3 million and had experienced a prolonged decline in occupancy. The lender, Korth Direct Mortgage, took control of the property in May 2024.
– In downtown Baltimore, the office tower at 300 E. Lombard St. is set to be sold out of receivership for $6.5 million—well below the $38.3 million it fetched in 2015. Imperial Realtors LLC, based in Cumberland, Maryland, won the online auction with four bidders participating. The building lost a significant state lease in 2024, contributing to its depreciation.
– A Cincinnati-based firm, Grammas Investments, has acquired a Montgomery, Ohio office building from its Columbus-based owner out of receivership for $2.75 million. The 68,200-square-foot, three-story building was previously owned by Genoa Property Group. A foreclosure action was filed in May 2024 due to default on a $3.27 million loan from LCNB National Bank.
– Dozens of New York City apartment buildings owned by Pinnacle Group, a firm led by Joel Wiener, are being marketed for sale or refinancing following a Chapter 11 bankruptcy, according to Bloomberg. The properties, which contain thousands of rent-stabilized units throughout the city, are subject to more than $564 million in debt held by Flagstar Bank, which initiated foreclosure actions earlier in 2024.
– The developer behind the mixed-use site known as Main Street at Tuttle Royale in Royal Palm Beach, Florida, has filed for Chapter 11 bankruptcy. The filing occurred on September 23, one day before a foreclosure auction was scheduled. The site is being foreclosed over a $47 million-plus loan.
– The City of Portland, Oregon is preparing to foreclose on eight vacant commercial properties due to unpaid liens associated with nuisance issues and code violations. The city’s Revenue Division identified the properties as distressed, and they are heading to auction once foreclosure proceedings are complete.
– The 540 West Madison office property in Chicago’s West Loop has been transferred to special servicing despite maintaining a debt service coverage ratio (DSCR) above 4.00x. Bank of America exercised a lease termination option, and the borrower has failed to remit termination payments, prompting a Notice of Default. A loan modification is being considered for year-end resolution.
– The Langdon at Walnut Park multifamily community in north Austin, Texas has also entered special servicing due to non-monetary default. The borrower failed to make a required loan paydown after not securing an affordable housing tax exemption. The $60 million loan represents 5.6% of a major commercial mortgage-backed securities (CMBS) transaction.
– Gulfport Premium Outlets in Mississippi, which carries a $50 million CMBS loan, has been transferred to a special servicer prior to its December 2025 maturity. The property’s 2024 net cash flow is 16% below its issuance performance, and occupancy has dropped from 92% at origination to 85% as of March 2025.
– The Empire Corporate Plaza office complex in Rancho Cucamonga, California, has entered special servicing following a failed payoff at maturity in August 2025. The occupancy rate has plummeted to 32% from a peak of 91% in 2021, sharply below the underwritten level of 81%.
These developments further underscore the ongoing challenges in both office and multifamily sectors as property owners grapple with loan maturities, tenant retention issues, and shifting market dynamics.
