Return to Lender: Week of Sept. 5, 2024

Lowry Apartments in downtown St. Paul was sold for $7 million at a foreclosure auction to the owner of the unpaid mortgage, according to Minneapolis/St. Paul Business Journal. The new owner of the 11-story, 134-unit apartment building, located at 345 N. Wabasha St., is Lowry Apartments LLC, a subsidiary of Colliers. Lowry Apartments LLC sought the foreclosure after the previous property owner defaulted on a $16.9 million mortgage, according to a foreclosure notice and public court filings. The property was previously owned by St. Paul-based Madison Equities.

One of Kansas City’s oldest skyscrapers is positioned for a transfer from its out-of-town owners to a lending institution, which would become responsible for resolving extensive blight and security problems it outlined during months-long Chapter 11 bankruptcy proceedings, according to the Kansas City Business Journal. Axis KC LLC bought Kansas City’s 12-story Scarritt Building and conjoined four-story Scarritt Arcade in 2019. It proposed, but never began, making it into a hotel and coworking offices, then apartments and retail space. Last month, Axis, an affiliate of St. Augustine-based developer Augustine Development Group, entered a settlement agreement with DLP Lending Fund. Under that, it would convey the historic Scarritt complex to the lender through a deed-in-lieu of foreclosure.

In another situation involving Augustine Development and DLP, the Jacksonville Business Journal reported that Augustine faces a foreclosure lawsuit on the long-abandoned Ambassador Hotel, St. Augustine-based DLP Capital, through Good As New Ventures LLC, sued Axis Hotels LLC, which is associated with Augustine Development Group, stating Axis Hotels has not paid the judgment amount of $10.58 million plus per diem interest of $6,000. Augustine Development has attempted to revive the hotel for the past six years.

A luxury residential tower in Downtown Atlanta was slated for foreclosure Sept. 3, the Atlanta Business Chronicle reported. Canada-based property investment firm Frankforter Group, owner of the 17-story Generation Atlanta, defaulted on its loan valued at the property’s principal amount of $104.4 million. Generations Property Owner LLC filed last month to foreclose on the property, which Frankforter acquired in late 2021 for a record $126.9 million.

Morningstar Credit reported that City Club Apartments Lafayette Park ($28.1 million | 4.1% of FREMF 2022-KF139) was moved to the special servicer as of the August reporting. The Detroit property’s performance has trended downward, with occupancy plunging from 97% at issuance to 68% as of March 2024. The 2023 net cash flow was well below breakeven.

The $18.2-million loan on Sutter Ranch (4.5% of FREMF 2021-KF114) a 228-unit multifamily property in Houston, has moved to special servicing after falling delinquent, reported Morningstar Credit. The revenue for 2023 exceeded the underwritten level, but…