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Return to Lender: Week of Nov. 30, 2023



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 + Distressed Assets

  • A newly developed apartment complex in downtown Walnut Creek, CA has been handed back to its lender after the property’s loan flopped into delinquency, the Mercury News reported. NoMa Apartments, which was developed by Anton DevCo, is now owned by an affiliate of TPF Equity REIT Operating Partnership, the property’s lender, The developer obtained a construction loan of $79.8 million in 2019, but owed about $83 million including fees, penalties and late charges by the time the lender acquired the property via deed in lieu of foreclosure.  
  • Veritas Investments has handed ownership of 20 residential buildings in San Francisco over to Prado Group. The San Francisco Business Times reported that locally based Prado purchased a $124-million mortgage portfolio tied to the properties from New York-based Mack Real Estate Credit Strategies, Veritas’ original lender, for an undisclosed amount in September. The 20 properties represent six of the seven loans in that portfolio; Veritas has yet to hand over the building backed by the seventh loan. 
  • 2724 11th St. NW, a Washington, DC apartment building that was the subject of a lawsuit filed by the former DC attorney general has been sold and will undergo extensive changes, reported the Washington Business Journal. SK Management LLC plans a redevelopment of the 26-unit building in the District’s Columbia Heights neighborhood, after buying the property for $5.3 million last month. Nick Murray, Marty Zupancic and John Slowinski from Marcus & Millichap brokered the sale, which followed the March 2022 bankruptcy filing by Jefferson-11th Street LLC. 
  • Colliers is marketing the historic Loyalty and Hamilton buildings in downtown Portland, OR in a receivership sale. Loyalty and Hamilton total just under 77,000 square feet combined and are roughly a third leased, reported the Portland Business Journal. Manchester Capital Management, a family office in Manchester, VT, bought the buildings in 2013 for $12.45 million and refinanced with Cantor Fitzgerald in 2017 for $11.75 million. The loan balance remains about the same now. Colliers is working on behalf of the loan servicer and receiver to recoup at least some of what is owed. 
  • Developer Greenland is on the verge of losing control of the delayed second phase of Pacific Park, a 22-acre mixed-use development formerly known as Atlantic Yards and located in downtown Brooklyn. According to multiple published reports, the company defaulted on nearly $350 million worth of loans backing the six rental development sites of Pacific Park’s Phase 2. The lender, Nick Mastroianni’s U.S. Immigration Fund, has moved to foreclose on the sites. Newmark’s Jordan Roeschlaub and Adam Spies reportedly are marketing a UCC foreclosure, with an auction scheduled for January 2024. 
  • Crain’s Chicago Business reported that the owner of a 24-story office building at 111 W. Jackson Blvd. in downtown Chicago defaulted on its $105-million mortgage tied to the property by failing to make loan payments since May, according to a foreclosure lawsuit filed in Cook County Circuit Court. The 576,774-square-foot building is owned by a venture of New York-based real estate firm Melohn Group, and the complaint was filed by an entity representing bondholders in the loan, which was packaged with other loans and sold off to CMBS investors.  
  • After failing to secure any tenants after the pandemic shutdowns, the owners of a recently renovated office complex in Sunnyvale, CA defaulted on their loan. Known as Horizon Sunnyvale, the four interconnected office buildings on Oakmead Parkway, could face foreclosure, the Silicon Valley Business Journal reported. The property owner, Embarcadero Capital Partners, took out a $63.5-million loan from lender LoanCore Capital REIT in 2019, but has apparently stopped making payments.  

Inside The Story

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces.
Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications.
Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

  • ◦Sale/Acquisition
  • ◦Financing

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