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Recent reporting highlights a busy week for distressed commercial real estate across multiple U.S. markets, spanning office, hotel, multifamily and land assets and involving both balance-sheet lenders and CMBS structures.
In Manhattan, the 220,000-square-foot office building at 345 Seventh Ave. in the Penn Plaza area is being offered for sale through a Uniform Commercial Code foreclosure, according to Trepp. Benefit Street Partners financed the property’s $107 million acquisition in 2021 by a venture of Empire Capital Holdings and an affiliate of Namdar Realty Group. Three years later, as the venture was preparing to hand the property back to Benefit Street, it instead sold the asset to a venture led by Kohan Retail Investment Group for $73 million at the start of last year. Benefit Street had filed a UCC financing statement with the city, preserving its senior creditor position and claim to the building, and a UCC Article 9 auction is scheduled for March 13.
In Baltimore, the Renaissance Baltimore Harborplace Hotel is set for a March 11 auction on the steps of the Clarence M. Mitchell Courthouse, just months after entering foreclosure at the end of 2025, the Baltimore Business Journal reported. The 622-key Inner Harbor property at 202 E. Pratt St. is being brought to market by Atlantic Auctions following the owners’ default on a $71 million loan in November.
In Media, Pennsylvania, the Rosetree complex, a 268,000-square-foot office property at 1400 N. Providence Road, is the subject of a foreclosure action, according to the Philadelphia Business Journal. The asset was placed into receivership after an entity affiliated with Keystone of West Conshohocken, Pennsylvania, failed to pay off a $45.5 million CMBS loan at its September maturity. CWCapital, the special servicer, stated in its foreclosure complaint that $39.4 million was outstanding as of Oct. 23, with interest continuing to accrue.
In Austin, the Austin Business Journal reported that a Chapter 11 bankruptcy case for WC 707 Cesar Chavez LLC, the World Class Holdings entity that owns the land under the downtown IHOP restaurant, has been dismissed. Judge Christopher Bradley ended the case on Feb. 18, potentially clearing the way for foreclosure to resume on the 0.8-acre parcel, which the Travis Central Appraisal District values at $26.8 million and which sits at the north end of the Rainey Street District.
Several CMBS loans also shifted into distress. The Riley, a multifamily property in Richardson, Texas, backing a $53.8 million loan representing 6.7% of BBCMS 2024-C26, transferred to special servicing, according to Morningstar Credit. While the servicer has not provided new detail, prior commentary referenced a cash trap triggered for several reasons, including tax exemption issues. The property participates in the Garland Housing Finance Corporation program, which grants real estate tax exemption if certain conditions are met and requires mandatory prepayments if the exemption is not obtained or is lost.
In Houston, the Spectra Energy Headquarters, backing a $48.3 million loan that comprises 13.55% of JPMBB 201-C255 and is referenced in CMBX.8, moved to special servicing ahead of the lease expiration on dark space at the property, Morningstar Credit reported. The office had been fully leased to Spectra Energy, which was acquired by Enbridge, but the tenant vacated the space a couple of years ago while remaining obligated on the lease through April 2026.
In New York City’s Bronx borough, the Singer Bronx Multifamily Portfolio, securing a $39 million loan that represents 4.4% of BBCMS 2022-C14 and is referenced in CMBX.16, transferred to special servicing for payment default after several months of delinquency, Morningstar Credit reported. Although the most recent full-year financials through the end of 2024 appeared relatively healthy, servicer commentary cites multiple pressure points, including a cash trap, force-placed insurance and delinquent real estate taxes.
Finally, Morningstar Credit reported that the CMBS loan on the Norfolk Waterside Marriott, a $33.5 million note representing 5.0% of BANK5-5YR2, moved to special servicing for imminent default. Performance at the 407-key hotel in Norfolk, Virginia, is unclear, with financial reporting indicating a DSCR of 0.06x for the trailing 12 months ending September 2025, while servicer commentary cites a 1.23x DSCR for the same period. A cash trap had previously been triggered because the loan failed to maintain a 10% debt yield.
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