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The highest of two bids for the 800-acre plus Aspen Valley Ranch, which was advertised for $220 million in May 2020, came in at $28.5 million during a privately conducted virtual auction on Wednesday, according to bankruptcy court records, the Aspen Daily Ranch reported. The winning bid was placed by the lenders who initiated a foreclosure action on the ranch property in March, citing an outstanding debt of $88.2 million, an amount that has since grown past $100 million with interest. The loan was given to Charif Souki, who developed the property and pledged it as collateral. Aspen Valley Ranch, however, declared chapter 11 bankruptcy in late July, icing the lenders’ run at a foreclosure auction in Pitkin County. An auction was held nonetheless this week and conducted by Aspen Valley Ranch following months of written and oral arguments in the bankruptcy case about the terms of the auction and bidding process. As secured creditors, the lenders prevailed in the closed auction with a “credit bid,” meaning that amount would be applied to the balance owed by Souki, who led a group of investors that bought the ranch for $27 million in 2013, before it was developed into a family retreat and a neighborhood of luxury homes.

Federal housing authorities persuaded Texas Capital Bancshares Inc. to help with the fallout from a bankrupt reverse-mortgage provider, then went back on their promises of financial support, the company said in a lawsuit Wednesday, Bloomberg News reported. The Government National Mortgage Association, known as Ginnie Mae, canceled liens on tens of millions of dollars in collateral after the bank agreed to make a loan to Reverse Mortgage Funding LLC, according to the lawsuit. The loan was intended to prop up customers of the failed company, which was one of the largest providers of government-backed reverse mortgages. The firm’s Texas Capital Bank unit provided the funds “on an emergency basis, in an effort to protect thousands of senior citizen mortgagors,” the bank said in the complaint. “Just weeks later, Ginnie Mae reversed course and purported to leave TCB empty-handed.” The controversy traces its roots to last year’s bankruptcy of Reverse Mortgage Funding. Like many in the industry, the firm had been squeezed by surging interest rates and regulatory pressures. Texas Capital claims in the lawsuit that Ginnie Mae persuaded it to provide debtor-in-possession financing after the failure of Reverse Mortgage Funding.

Hundreds of thousands of people nationally are signing up with state insurers of last resort as home insurers pull back from disaster-prone areas, the Wall Street Journal reported. More than 30 states have some form of last-resort plan for people who can’t get coverage elsewhere. Plans can be statewide or restricted to coastal regions. Coverage varies between states, ranging from all-perils policies to those that cover wind, hail or fire only. The plans were designed to be temporary safety nets. As the private market shrinks, however, the plans are becoming insurers of first, not last, resort in some high-risk areas. In Florida, the Citizens Property Insurance last-resort plan is the biggest home insurer in the state with 1.4 million policies. Florida, California and Louisiana have each seen policyholder numbers for their last-resort plans more than double within the past five years, according to plan representatives, and there’s no sign of a letup. The California Fair Access to Insurance Requirements Plan is piling on policies, adding what a spokesman called a historic 25,000 policyholders in August — more than three times the 7,000 monthly cap on new home policies Farmers Insurance imposed recently in the state.

WeWork said yesterday that it would not make two sets of interest payments totaling about $95 million, a move meant to jump-start negotiations with its lenders at the same time it tries to cut costs with its landlords, the New York Times reported. The missed interest payments will undoubtedly spur speculation of a bankruptcy filing. But WeWork says it has the cash on hand, and the company has a 30-day grace period to make the payments, which were due Monday. At the end of June, it had $205 million in cash and access to a credit line worth $475 million. “I believe they will absolutely understand our decision to enter into the grace period,” WeWork’s interim chief executive, David Tolley, said in an interview. He called the move “typical” as a “precursor to a conversation.” Skipping an interest payment is not necessary to negotiate with lenders. But it is a move sometimes used by indebted companies to put pressure on lenders to restrike deals under more favorable terms. In the first half of this year, WeWork’s operations consumed $530 million. The co-working company warned investors in August that “substantial doubt exists about the company’s ability to continue as a going concern,” without taking measures like decreasing its lease costs and making its debt load more manageable. In early September, WeWork said that its lease costs made up more than two-thirds of its operating liabilities, a heavy weight on its cash flow that it was trying to alleviate by renegotiating nearly all of its leases and pulling out of some unprofitable locations.

Office prices in the U.S. are due for a crash, and the commercial real estate market faces at least another nine months of declines, according to Bloomberg’s latest Markets Live Pulse survey. About two-thirds of the 919 respondents surveyed by Bloomberg believe that the U.S. office market will only rebound after a severe collapse. An even greater majority says that U.S. commercial real estate prices won’t hit bottom until the second half of 2024 or later. That’s bad news for the $1.5 trillion of commercial real estate debt that according to Morgan Stanley is due before the end of 2025. Refinancing it won’t be easy, particularly the roughly 25% of commercial property that is office buildings. A Green Street index of commercial property prices has already fallen 16% from its peak in March 2022.

Municipal bonds tied to Destiny USA, the biggest shopping mall in New York state, were cut deeper into junk by Moody’s Investors Service on Wednesday because the complex is unlikely to meet a key measure of profitability needed to extend an outstanding loan, Bloomberg News reported. Moody’s lowered the rating on municipal bonds backed by payments in lieu of taxes to Caa2 from Caa1 and revised the outlook to stable, the company said in a release. The downgrade reflects an increase in “default risk” because the net-operating-income target needed to extend an existing subordinate mortgage-backed security loan past June 2024 is “unlikely to be satisfied.” The municipal debt was originally issued to expand the Carousel Center mall in Syracuse, N.Y., into a super-regional shopping complex, now called Destiny. About $270 million of Pilot bonds are outstanding, according to data compiled by Bloomberg. The mall met the first NOI target of $16 million to extend the CMBS loan to June 6, 2024, but the next target is 18.75% higher, “a high threshold that will be difficult to achieve,” Moody’s said. If the threshold isn’t satisfied and the obligor, Carousel Center Company LP, is unable to refinance the loan, then Carousel would enter receivership and the property may be put up for sale, Moody’s said.

Wells Fargo & Co. is buying the former Neiman Marcus space at Manhattan’s Hudson Yards for roughly $550 million and plans to convert it into offices, Bloomberg News reported. The transaction includes about 400,000 square feet (37,000 square meters) spanning floors five through seven at 20 Hudson Yards, according to the people, who asked not to be identified because the matter is private. The sellers are the developers, Related Cos. and Oxford Properties Group, which still own the rest of the 11-story building, home to the project’s shopping mall and restaurants. The deal, expected to close soon, is one of the largest commercial-property transactions in Manhattan this year. Many buyers and sellers have been unable to agree on pricing as values decline and borrowing costs rise.

A national real estate brokerage filed bankruptcy in Florida Southern District Court to restructure nearly $60 million in debt following a slew of state lawsuits over its marketing practices, the South Florida Business Journal reported. Boca Raton-based MV Realty Holdings submitted a chapter 11 petition on Sept. 22 on behalf of all of its entities across 30 U.S. states claiming it owes $58,763,035.80 to three lenders. Its largest creditor is a Monroe Capital credit facility for $40 million, followed by two private credit funds by Goodwood Lenders for a combined $18,763,035.80. The company currently lists its assets between $10 million and $50 million — so it owes more than what it's currently worth. MV Realty said that since last year it has been financially burdened by legal fees associated with lawsuits filed by the state governments of Florida, Pennsylvania, Massachusetts, Ohio, North Carolina, New Jersey and Indiana against the firm and other individual officers and licensed real estate brokers working in connection with its Homeowner Benefit Agreements.

Hartman SPE, LLC, a Houston-based office, retail and industrial real estate firm, filed chapter 11 protection, RealtyNewsReport.com reported. Silver Star Properties REIT is a transitioning company that was formerly affiliated with the Allen Hartman real estate investment organization. At the beginning of 2023, Harman SPE had over 40 office, retail and warehouse properties with about 7 million SF located in Houston, San Antonio and Dallas. Silver Star Properties has been disposing of its Texas-focused commercial property portfolio as it pursues a plan to become a REIT concentrated on self-storage properties. In the 1980s, Houston investor Al Hartman founded the predecessor roots of Hartman Short Term Income Properties XX. Mr. Hartman is no longer with the firm and CEO Mark Torok was replaced recently.