Lender U.S. Bank won a foreclosure auction for 750 Lexington Ave. in Midtown Manhattan, paying a nominal $1,000 for the 31-story office tower, Crain’s New York Business reported. A New York state court ordered the auction last month to pay off a $155.9-milion loan balance. The loan, backed by the Cohen Brothers Realty-owned office property, has been in special servicing since October 2023.
The Frame, an eight-story office development project at 541 W. 21st St. in Manhattan’s West Chelsea neighborhood, is now in the hands of real estate firms G4 Capital Partners and SME Capital Ventures, which bought the site through a bankruptcy auction for $46.2 million, reported Crain’s New York Business. G4 Capital, the site’s primary lender, provided a $56-million mortgage for the project back in 2019. Mezzanine lender SME Capital of SoHo, meanwhile, reportedly contributed an additional $5 million. Amid the pandemic, the project, a conversion of a prewar arts-storage warehouse into an open-floor-plan-style space for tech tenants, reportedly ran out of funds just short of completion.
Buffalo Business First reported that the office of the New York State Comptroller has started foreclosure proceedings against a senior apartment community in North Buffalo, alleging the property owner has defaulted on a loan with more than $4.6 million owed on construction financing for Jill Joseph Tower The comptroller filed a complaint Jan. 12 in state Supreme Court against Jill Joseph Tower LLC, the Jill Joseph Housing Development Fund Corp. and developer Michael Joseph.
Lenders are moving to offer a loan backed by a downtown San Francisco office tower for sale, the San Francisco Business Times reported. Notes sent to bondholders for 225 Bush St. listed the designated workout for a nonperforming $350-million loan backed by the building as “note sale” for the first time. The special servicer overseeing the loan is reportedly in talks with JLL about bringing the debt to market. The building’s lenders have been working to determine the best path forward for 225 Bush since building owner Kylli defaulted on the $350-million debt in November 2024.
Morningstar Credit reported that the Solano Mall loan ($98.3 million | COMM 2012-CR3 | CMBX.6) has landed in special servicing for imminent monetary default, with no additional details provided. The loan was originally set to mature in 2022 but was purchased by Spinoso Real Estate Group in 2023 and extended to October 2026. The Fairfield, CA superregional mall’s cash flow has trended downward since issuance, with 2024 net cash flow of $5.4 million, down from $13.9 million at issuance.
The $87-million CMBS loan backed by Pinnacle II (WFCM 2016-LC24, WFCM 2016-BNK1, & WFCM 2016-C35 | CMBX.10) has moved to special servicing for imminent monetary default, reported Morningstar Credit. The loan, backed by an office property in Burbank, CA, is scheduled to mature in June 2026. The property has been nearly 100% vacant since the sole tenant, Warner Bros., vacated ahead of its October 2022 lease expiration. As a result, the property’s net cash flow has been negative since 2023.
Park Place at Florham Park ($62.5 million | UBSCM 2018-C8 & UBSCM 2018-C9 | CMBX.12) transferred to special servicing after seeing its cash flow fall below breakeven, Morningstar Credit reported. The loan is backed by a four-building office park in Florham Park, NJ. Occupancy has trended downward over time, and the recent loss of a 25,000-square-foot tenant finally pushed its DSCR under 1.00x, with the borrower stating it is unable to fund shortfalls. The loan matures in February 2028.
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