**Return to Lender: Weekly Round-Up – Week of September 18, 2025**
**Arbor Realty Trust Acquires Memphis Properties via Foreclosure**
The Memphis Business Journal reports that an LLC connected to Uniondale, NY-based Arbor Realty Trust has acquired six multifamily properties in Memphis through a foreclosure sale. Originally, Arbor provided $84.33 million in financing to Texas-based KeyCity Capital to purchase the 1,240-unit portfolio in 2021. After KeyCity defaulted on its loan, new filings with the Shelby County Register of Deeds show the properties were auctioned. Arbor-affiliated Memphis 6 Port PO LLC acquired them for a combined $42.27 million.
**Denver Energy Center Sells for $5.25 Million**
The Luzzatto Company continues its discounted acquisitions in Denver. This time, the developer acquired the Denver Energy Center, a nearly 900,000-square-foot office complex, at auction for just $5.25 million. In 2013, the property sold for $176 million and was later acquired by JPMorgan Chase in a 2022 foreclosure auction for $88.2 million. Asher Luzzatto told the Denver Business Journal that the company is exploring a potential office-to-residential conversion for one of the towers.
**West Palm Beach Behavioral Health Hospital Headed for Auction**
According to the South Florida Business Journal, a behavioral health hospital in West Palm Beach is scheduled for auction due to a $10.64 million foreclosure judgment. Judge Scott Kerner of the Palm Beach County Circuit Court issued the judgment in favor of East West Bank against multiple defendants. The court auction is scheduled for November 17 and includes both a 50,154-square-foot hospital at 1041 45th Street and an 8,006-square-foot medical office at 4802 East Avenue.
**San Francisco’s 600 California St. to Hit the Market**
Over two years after WeWork Capital Advisors defaulted on a $240-million loan backed by the office tower at 600 California Street in San Francisco, the property is finally headed for sale. A court-appointed receiver has selected Newmark to bring the 359,880-square-foot building to market. Valued in early 2024 at approximately $124 million, current price guidance is in the mid-$120 million range.
**Rialto Capital to Sell Midtown South Loan or Property**
Rialto Capital Advisors, the special servicer of a $104.5 million CMBS loan secured by a 139,921-square-foot office property at 90 Fifth Avenue in Manhattan’s Midtown South, has enlisted Newmark to market the loan or the underlying property. Foreclosure proceedings are already underway. The asset is being promoted as a strong candidate for conversion.
**Banner’s Hallmark Stores File for Chapter 11 Bankruptcy**
Nearly 40 Hallmark stores under the Banner’s Hallmark name in Virginia have filed for Chapter 11 bankruptcy protection, citing seasonal cash flow challenges and the need to evaluate leases. CEO Leonard Banner and management company LBPO Management LLC of Gaithersburg, Maryland, are steering the restructuring effort. The company operates 39 Hallmark Gold Crown Stores across malls and shopping centers in the state.
**32 Avenue of the Americas Moves to Special Servicing**
The $425 million loan backing 32 Avenue of the Americas — a 1.2-million-square-foot office tower in Manhattan’s Hudson Square/Tribeca area — has transferred to special servicing ahead of its November 2025 maturity. Morningstar Credit reports that although the loan had remained current, post-pandemic declines in cash flow and occupancy (now at just 57%) prompted the move.
This week’s developments highlight ongoing stress in commercial real estate sectors across the country, reflecting broader economic challenges and shifting property uses.
