**Return to Lender: Week of Sept. 18, 2025**
**Memphis Foreclosure Deal**
An LLC affiliated with Uniondale, NY-based Arbor Realty Trust has acquired six multifamily properties in Memphis through a foreclosure sale, according to the Memphis Business Journal. Arbor initially provided $84.33 million in loans to Texas-based KeyCity Capital to acquire the properties, totaling 1,240 units, in 2021. After KeyCity defaulted, the properties were auctioned, and Arbor’s affiliate, Memphis 6 Port PO LLC, purchased them for a combined $42.27 million.
**Denver Energy Center Purchased at Steep Discount**
The Luzzatto Co. has acquired the Denver Energy Center at auction for just $5.25 million. The nearly 900,000-square-foot office complex last sold for $176 million in 2013 and was purchased by JPMorgan Chase for $88.2 million after a 2022 foreclosure. Speaking to the Denver Business Journal, Asher Luzzatto said the company is considering converting at least one of the towers into residential use, a strategy that has proven successful in the Denver market.
**West Palm Beach Behavioral Hospital Heads to Auction**
A behavioral health hospital and adjacent medical office in West Palm Beach are scheduled for auction following a $10.64 million foreclosure judgment, according to the South Florida Business Journal. A consent judgment was awarded to Pasadena, CA-based East West Bank against Sunshine Holdings 2019 LLC and related entities. The auction is set for November 17 and includes a 50,154-square-foot hospital and an 8,006-square-foot medical office.
**San Francisco Office Tower Hits Market After Loan Default**
More than two years after WeWork Capital Advisors (WeCap) defaulted on a $240 million loan backed by 600 California Street in San Francisco, the building is being put up for sale by court-appointed receiver Trigild. Trigild has appointed Newmark to market the 359,880-square-foot building, with pricing expected in the mid-$300-per-square-foot range — valuing it at approximately $120 million. The property was appraised at $124 million in early 2024.
**Manhattan Loan Sale or Foreclosure Looming**
Rialto Capital Advisors, the special servicer for a $104.5 million CMBS loan backed by the 139,921-square-foot office building at 90 Fifth Ave. in Manhattan’s Midtown South, has engaged Newmark to sell the loan. According to Trepp, Rialto is accepting offers on both the loan and the property, which is being pitched as a potential conversion play. Foreclosure proceedings have already begun.
**Banner’s Hallmark Stores File for Bankruptcy**
Nearly 40 Hallmark stores operating under the Banner’s Hallmark name in Virginia have filed for Chapter 11 bankruptcy protection due to seasonal cash flow issues. CEO Leonard Banner leads the company, which operates 39 Hallmark Gold Crown Stores across malls and shopping centers in the state. Their management entity, LBPO Management LLC, based in Gaithersburg, Maryland, also filed for Chapter 11 protection, according to the Kansas City Business Journal.
**Manhattan’s 32 Avenue of the Americas Moves to Special Servicing**
The $425 million loan for 32 Avenue of the Americas, a 1.2-million-square-foot office tower in the Hudson Square/Tribeca submarket of Manhattan, has been transferred to special servicing, according to Morningstar Credit. Despite remaining current throughout its term, the property’s occupancy has fallen to 57% amidst declining post-pandemic cash flows. The loan was scheduled to mature in November 2025.
