Return to Lender: Week of July 25, 2024

The note backing One North LaSalle ($67.2 million | 57.8% of CARB 2019-FL2) has been sold at a $58.5-million realized loss, according to Morningstar Credit. Namdar has purchased the note for just under $20.0 million according to the article. The loan on the Chicago office property has been in special servicing since June 2022 and the property was 56% occupied at last report.

Thor Equities has lost a pair of retail properties in Manhattan to foreclosure after defaulting on a total of $34.2 million in debt, Trepp reported, citing Crain’s New York Business. The Brooklyn, NY developer lost the 26,000-square-foot property at 446 West 14th St. in the Meatpacking District, against which it had owed $21 million, and the 9,000-square-foot property at 440 Broadway in SoHo, which had backed a $9.98 million -oan that was securitized in 2013. Maverick Real Estate Partners of New York took the 446 West 14th St. property with a $5-million credit bid. It had acquired the loan from Granite Point Mortgage Trust two years ago.

The court-mandated deadline for sale of San Francisco’s debt-laden Hilton San Francisco Union Square and Parc 55 hotels has been pushed into 2025, reported the San Francisco Business Times. San Francisco Superior Court Judge Charles Haines approved a request from the receiver and lender to move the deadline for sale of the nearly 3,000-key hotel complex from Sept. 1, 2024, to March 31, 2025. The approval also pushes out the deadline for the lender to foreclose on the property if a sale isn’t consummated, moving it to July 15, 2025. A recent appraisal found the combined value of the complex — the 1,919-key Hilton San Francisco Union Square and the 1,024-key Hilton Parc 55 — had plummeted by more than $1 billion since 2016. The hotels’ former owner, Park Hotels & Resorts, walked away from the properties last year with the looming maturity approaching for a $725-million CMBS loan from JPMorgan Chase guaranteed by the properties. While still open for business under Hilton, the hotels have been in court-enforced receivership since October 2023 in the care of receiver Michelle Russo, CEO of Hotel Asset Value Enhancement.

K-Star Asset Management, special servicer of a $47.5-million CMBS loan against the 149,193-square-foot office property at 222 Kearny St. in San Francisco, is expected to take the property through foreclosure in August, according to Trepp. The CMBS loan last received an interest payment in January. The collateral property is owned by a venture led by GEM Realty Capital, which acquired it in 2019 for $74.5 million. Cash flow declined to an annualized $2.74 million last year, compared to the $5.15-million projected annual cash flow in underwriting for the property. Meanwhile, occupancy declined to 65% as of last September.

Edward J. Minskoff Equities has defaulted on the $250-million loan against The Bluffs, a 500,000-square-foot office property in Playa Vista, CA, Trepp reported. Morgan Stanley provided the debt in 2016 to facilitate Minskoff’s $413-million purchase of the property. The Bluffs was built in 2009 at 12121 and 12181 Bluff Creek Dr. and underwent a renovation in 2021. More than 50% of the property is available for lease. A foreclosure can be scheduled for after Sept. 12.

The Minneapolis/St. Paul Business Journal reported that U.S. Bank Trust Co. is suing to foreclose on two Excelsior Crossings buildings in Hopkins, MN, alleging the current owners defaulted on the loan taken out to secure the property. A lawsuit filed in Hennepin County District Court alleges the owner of two of the three buildings that make up the office complex, Bridge Investment Group, failed to make loan payments in January. Court filings show U.S. Bank Trust Co. filed the suit “by and through” special servicer LNR Partners. The suit argues that payment failure constitutes a default on the loan, giving it the right to foreclose on the property and to an accelerated payment of $63 million, the amount remaining on the original $88-million loan.

US Bank Centre, a $31.5-million loan representing 3.4% of BANK 2019-B16, has been transferred to special servicing after a drop in occupancy, reported Morningstar Credit. The loan is secured by a 256,000-square-foot office building in Cleveland. There’s been a steady decline in occupancy over the years, from 96% at occupancy to 74% at year-end 2023. This has ultimately pushed the loan’s DSCR below breakeven.