Commercial real estate is in deep trouble. COVID and working from home put a huge and apparently permanent dent in demand. Borrowed money is the lifeblood of CRE, and interest rates are headed higher. From Tyler Durden at zerohedge.com:
Starwood Capital Group has defaulted on a $212.5 million mortgage backed by an office building in Sandy Springs, an ultra-wealthy suburb in northern Fulton County, Georgia, just above Atlanta.
The mortgage is on Tower Place 100, a 790,000 sqft mixed-use property built in 1974 and renovated in 2017. The largest tenant is WeWork companies which occupy 84,594 sqft.
At the end of 2022, the tower was 62% leased, down from 87% in 2018 when the loan was originated.
Bloomberg data shows the loan matured on July 9. Starwood has failed to refinance or pay off the debt. Delinquency commentary on the Terminal reads, “Borrower confirmed they are unable to pay off the loan at maturity. Counsel engaged. PNA pending.”
