Return to Lender: Week of July 18, 2024

A 119-key boutique hotel in downtown Alpharetta, GA has returned to its lender, the Atlanta Business Chronicle reported. The Hamilton, part of Hilton’s upscale Curio Collection, was foreclosed upon on July 2. An affiliate of Atlanta-based Peachtree Group was the highest bidder at the foreclosure sale, paying almost $42 million. In late 2021, the Peachtree Group affiliate issued a roughly $40-million loan to an entity tied to hotel developer Mayfair Street Partners. That loan was set to mature in January 2025.

Two San Francisco office buildings at 222 Kearny St. and 180 Sutter St. tied to $47 million worth of CMBS debt are heading to foreclosure, reported the San Francisco Business Times. The properties’ owner since 2019, an affiliate of Chicago-based real estate investment firm Gem Realty Capital and San Francisco-based Flynn Properties Inc., appears ready to walk away rather than continue paying interest on its 2019 loan from Goldman Sachs.

Aspiria Office Campus ($232.5 million | JPMCC 2021-BOLT) has transferred to special servicing ahead of its August 2024 maturity, reported Morningstar. The 3.7-million-square-foot property in the Kansas City suburb of Overland Park, KS has continued to underperform issuance expectations, with 2023 net cash flow down 70% from the underwritten amount, due to weak revenue combined with increased expenses. The largest tenant, T-Mobile, has downsized its space since issuance, and property occupancy was last reported at 66% in March 2024.

The securitized loan on 500 Fifth Ave. ($200 million | JPMBB 2014-C26 & CSAIL 2015-C1 | CMBX.8) moved to special servicing in advance of its October 2024 maturity date, Morningstar reported. The loan, backed by a 700,000-square-foot office building near Bryant Park in Midtown Manhattan, reported a DSCR above 3.00x for 2023 while maintaining 85% occupancy. According to Morningstar, “This loan was only levered to 33% based on the issuance appraisal, so it will be interesting to see how this one progresses with the special servicer.”

Also in New York City, the Queens Atrium loan ($164.4 million | JPMBB 2014-C22 & WFRBS 2014-C21 | CMBX.8) went to the special servicer after failing to pay off at the July 2024 maturity. The borrower on the loan, which is backed by an office building in Long Island City, requested an extension/modification last month. Again, this loan has performed well throughout its term, most recently reporting a 2.09x DSCR and 100% occupancy as of March, according to Morningstar.

Morningstar reported that the Marriott Midwest Portfolio ($82.5 million | CGCMT 2016-P3 & CGCMT 2016-P4 | CMBX.10) has moved into special servicing for the second time. Backed by eight hotel properties in the suburbs of Minneapolis and Detroit, the loan initially was modified and extended after hitting its initial maturity during the pandemic. The loan is now facing its extended maturity date in November 2024 and performance has been stagnant since the initial modification with the DSCR from 2023 falling below breakeven.

A CMBS loan collateralized by a single-story office building in Long Beach, CA, 444 West Ocean ($25.7 million | 2.6% of MSBAM 2017-C34 | CMBX.11) was transferred to the special servicer in July, according to Morningstar. At issuance, the largest tenant made up just 6.4% of the GLA and that remains the property’s largest space currently. However, numerous tenants have departed and occupancy dropped to 67% as of December 2023.