Return to Lender: Week of Sept. 12, 2024

Fortress Development CEO Andy Lakha has turned over ownership of the billion-dollar-plus Avenue Bellevue development to a lender, months after the openings of its the Bellevue, WA mixed-use project’s hotel and residential units. An affiliate of Silverstein Capital Partners, an early lender of the two-tower development, has assumed ownership and management, reported the Puget Sound Business Journal. Terms of the deal were not disclosed, and Lakha declined to comment on whether he retains an ownership stake.

The California owner of the former Garfield Suites Hotel in downtown Cincinnati, who has now failed twice to convert it into apartments, faces a new foreclosure lawsuit, reported the Cincinnati Business Courier. UC Funds, the Boston firm that originated a $23.4 million mortgage loan to Phoenix Acquisition in January 2022, filed a foreclosure and breach of contract suit in Hamilton County Court of Common Pleas against owner Michael Collier and others. UC Funds asked for the appointment of a receiver. Collier, according to the lawsuit, owes $26.3 million on the loan, including unpaid interest, penalties, collection costs, attorneys’ fees and miscellaneous expenses.

The $525-million CMBS loan on 150 E. 42nd St. in Midtown Manhattan (MSC 2014-150E) has been moved to special servicing, according to Morningstar Credit. The loan had remained current throughout its term despite the net cash flow underperforming underwritten levels in recent years, with the 2023 net cash flow falling 17% below issuance levels. The office property’s largest tenant, Wells Fargo, occupying 27% of the GLA, will relocate to Hudson Yards in late 2026 but remains obligated to pay rent until December 2028.

Morningstar Credit reported that One California Plaza ($300.0 million | CSMC 2017-CALI & CSAIL 2017-CX10 | CMBX.11) has moved to the special servicer as of the September 2024 remittance as it faces maturity in November 2024. The loan, backed by an office building in the Los Angeles CBD, did a special servicing stint in 2021 for a cash management issue that was ultimately settled. Performance has fallen over the years, with 2023’s net cash flow trailing the underwritten figure by 37%. Although occupancy had settled into the mid-70% range, servicer commentary notes that the pending departure of Skadden, which leases 107,058 square feet, will drop occupancy to 63%.

A&G Real Estate Partners will market 296 Big Lots, Inc. store leases for sale across the United States. Columbus, OH-based Big Lots, which operates more than 1,300 stores across 48 states, initiated voluntary Chapter 11 proceedings on Sept. 9 to facilitate a sale of substantially all its assets and business operations to an affiliate of Nexus Capital Management LP.