Distress across retail, office, hotel and multifamily assets continues to work through the system as lenders and special servicers move loans toward resolutions, note sales and asset dispositions.
In the Philadelphia region, Willow Grove Park Mall in Montgomery County is expected to change hands in a lender-directed sale. Namdar Realty Group, Mason Asset Management and CH Capital Group are reported to be under contract to acquire the retail property from PREIT. A representative for PREIT said the lender-directed process is underway and anticipated to close in the near term, following the maturity of PREIT’s $170 million loan and the decision by lender PGIM Inc. to list the mall’s debt for sale earlier this year.
In New York, the Kingswood Center loan liquidated this month via a discounted payoff. The $65.5 million CMBS loan (COMM 2018-COR3 | CMBX.12), backed by a 129,000-square-foot mixed-use building in Brooklyn, generated a $46.6 million loss on the loan and $53.7 million of losses to the bonds after non-recoverable advances. Those losses wiped out classes H-RR and G-RR and reduced class F-RR by about 25%. The loan had been in special servicing since May 2023 after occupancy dropped to 35%.
In the Washington, DC region, Baltimore-based Atapco Properties acquired Charlestowne North Apartments, a 178-unit affordable housing community in Greenbelt, MD, from Freddie Mac for $22.6 million. The nine-story property has a long history of financial and maintenance problems linked to its previous owner’s loan distress. The purchase price equates to roughly $126,000 per unit, according to the Baltimore Business Journal.
Office distress continues to surface in multiple markets. In Pittsburgh, three office buildings totaling 351,000 square feet at Parkway Center are slated to be auctioned on TenX beginning August 24. The auction is part of a wider JLL sales strategy to dispose of a six-building, 590,000-square-foot portfolio formerly owned by PWC Pitt LLC, an affiliate of Market Street Real Estate Partners, which acquired most of the offices at Parkway Center in 2018 before lenders forced the complex into default.
In Deerfield, IL, Hilco Real Estate, in cooperation with First Financial Network, set September 10, 2026 as the qualified bid deadline for the leasehold interest in Corporate 500, an institutional four-building office campus totaling 696,770 square feet on Chicago’s North Shore. Lender GreenState foreclosed on the campus this past winter, and the offering provides investors a chance to control the existing improvements and pursue operating upside in a mature suburban office submarket.
On the West Coast, a Pleasanton, CA office campus known as Rosewood Commons, totaling 837,000 square feet, is being marketed for sale after falling into loan default and being placed under receivership. Court-appointed receiver David Kieffer of the Stapleton Group engaged JLL to market the property. Rosewood Commons was one of four assets securing a $400 million loan that an entity affiliated with Swift Real Estate Partners defaulted on at maturity in 2024, prompting Wells Fargo to pursue four separate judicial foreclosures.
Multiple CMBS loans have recently transferred to special servicing around impending or missed maturities. Project James, a $377.6 million loan (BSREP 2021-DC) secured by a portfolio of office properties in Washington, DC and Northern Virginia, moved to special servicing after missing its August 2026 final maturity date. Two property releases during the term reduced the portfolio to six assets and paid the loan down by $65.5 million.
In hospitality, the $325 million CMBS loan on the Hyatt Regency New Orleans (NOHT 2019-HNLA) transferred to special servicing after missing its April 2026 maturity date. Morningstar Credit reported that the delay reflects a four-month forbearance request while the borrower works to finalize takeout financing; the loan had previously been modified to extend the maturity to April 2026. The $37 million CMBS loan on the SIXTY Hotel Beverly Hills (6.5% of CSAIL 2018-CX12), secured by a 118-key hotel on Wilshire Boulevard in Beverly Hills, also moved back into special servicing after failing to repay at its August 2026 maturity. That loan originally matured in August 2022 and has since been modified and extended several times with additional forbearances.
Retail and office CMBS stress continues in urban submarkets. The $108 million Harlem USA loan (MSC 2016-BNK2 & MSBAM 2016-C31 | CMBX.10), secured by a 246,000-square-foot retail property on 125th Street in Harlem, shifted to special servicing ahead of its October 2026 maturity. While performance has deteriorated since before the pandemic, net cash flow in 2025 was the highest since 2019. In Silver Spring, MD, the $35 million Silver Spring Plaza loan (6.5% of WFCM 2018-C46), backed by a 243,000-square-foot office building, transferred to special servicing for a second time after missing its July 2026 maturity, with performance declining since its initial modification in 2023.
