%1

Brookfield Asset Management Inc. is facing “imminent default” on a downtown Chicago office tower as it struggles to stay current on debt payments, Bloomberg News reported. The building, at 175 West Jackson Blvd., near Willis Tower, is home to financial firms and the Chicago office of the U.S. Securities and Exchange Commission. It was 62% occupied as of September, according to a report on the mortgage. “Due to the continued fallout from Covid there has been very little leasing activity in the Chicago submarket,” according to commentary on the mortgage compiled by Bloomberg. Brookfield paid $305 million for the building in April 2018, according to Real Capital Analytics. It has $258.6 million of debt on the property in two commercial mortgage-backed securities. Management of the loan was transferred this month to LNR Partners, the special servicer in charge overseeing a workout.

SL Green Realty Corp., the property manager of a bankrupt Manhattan skyscraper backed by Chinese conglomerate HNA Group, said the building owner’s chapter 11 filing should be thrown out because it was filed in bad faith to keep it from losing control of the property, WSJ Pro Bankruptcy reported. SL Green, which is also a preferred equity investor in the HNA-backed building owner of 245 Park Avenue, said in court papers that the chapter 11 filing of PWM Property Management LLC was meant to thwart a forced sale. New York-based PWM sought protection from creditors last month in the U.S. Bankruptcy Court in Wilmington, Del., blaming SL Green for alleged substandard property management. SL Green has denied mismanaging the property and said the bankrupt “shell companies” that went into chapter 11 have no employees and aren’t insolvent, with assets exceeding liabilities by roughly $300 million. PWM has said it would use the bankruptcy proceedings to end its agreement with SL Green and hire a new property manager. On Friday, PWM lawyer Thomas Lauria said that the allegations in SL Green’s motion to dismiss the chapter 11 cases are without merit. SL Green, which has invested roughly $150 million in the building, said one reason that 245 Park was placed in bankruptcy is to prevent SL Green from exercising its rights to force a sale of 245 Park. SL Green said that its consent was required, but not sought, for 245 Park to file for bankruptcy.

Wells Fargo & Co. sued to seize and sell the Standard High Line Hotel in New York on behalf of its creditors, claiming the Hong Kong-based owner, Goodwin Gaw, has failed to make payments on a $170 million loan since May 2020, Bloomberg News reported. Gaw, the chairman of Gaw Capital Partners, owes more than $186 million in principal, interest and fees on the 338-room hotel that straddles the elevated High Line park on Manhattan’s West Side, according to the complaint filed Nov. 1 in Manhattan federal court. New York hotels have struggled after the COVID-19 pandemic forced them to shut down. Occupancy at the Standard was 30% as of December, climbing to 76% in June, according to commentary on the mortgage. The hotel is currently open as is its restaurant. Gaw will “vigorously defend” against the foreclosure, the company said in an email. It said Apollo Global Management Inc., which owns a note that allows it to take control of the property in case of default, spurned settlement offers and payments to serve its own interests.

Washington Prime Group, the Columbus, Ohio-based owner of Polaris Fashion Place and dozens of other shopping centers, has emerged from bankruptcy with new leadership, the Columbus Dispatch reported. Lou Conforti has stepped down as the company's chief executive officer after five years in the position. Mark Yale, the company's chief financial officer and executive vice president, and Josh Lindimore, the company's head of leasing and also an executive vice president, will serve as interim co-CEOs, according to a statement issued by SVPGlobal, Washington Prime's new majority owner. “SVPGlobal recognizes the value of our brand, the potential of our assets, and, as importantly, our employees," Conforti said in the statement. Washington Prime filed for bankruptcy protection in June, after struggling for more than a year with a pandemic that crushed mall revenue and traffic. In its bankruptcy filing in Texas, Washington Prime listed assets of $4.03 billion and debts of $3.47 billion. Washington Prime followed other shopping center owners into chapter 11 during the pandemic, including CBL Properties and PREIT, which together own 130 shopping centers.

A company that owns four units in the Epic West Condominium in downtown Miami filed chapter 11 reorganization, the South Florida Business Journal reported. Miami-based Sky Media Pay, formerly known as Sky Media, submitted its chapter 11 petition in U.S. Bankruptcy Court in Miami on Oct. 29. It was signed by Paola Angulo as president of the company. The petition listed $2.52 million in assets, mostly the condos, compared to $4.5 million in liabilities. The bankruptcy filing put a halt to three pending foreclosure lawsuits in Miami-Dade County against Sky Media Pay over three of the condos. One of those cases had a foreclosure auction set for Nov. 1, only a few days before the chapter 11 was filed. The case management summary describes Sky Media Pay as being in the business of advertising sales on television and owning condos. It said it filed chapter 11 because of the foreclosure lawsuits. Its revenue for 2021 year-to-date was $60,000, following revenue of $163,971 in 2020 and $431,463 in 2019.

Freddie Mac is introducing a program to help renters build their credit history. The new program incentivizes apartment operators to report on-time rent payments through technology provided by Esusu Financial, the Washington Post reported. The technology automatically delivers on-time rental payment data from property management software programs to the credit bureaus. If renters miss payments, they are automatically unenrolled from the program so that negative information is not delivered to the credit bureaus (Equifax, Experian and TransUnion) if they are struggling financially. Freddie Mac is the largest purchaser of multifamily loans, accounting for approximately 20 percent of the market. More than 90 percent of the rental units funded through Freddie Mac are affordable to households with low to moderate incomes. Freddie Mac will provide closing cost credits on loans to apartment owners who agree to report on-time rental payments through Esusu’s platform.

The U.S. residential rental vacancy rate dropped further in the third quarter as the economy continued to normalize after severe disruptions caused by the COVID-19 pandemic, potentially indicating that high inflation could last for a while, Bloomberg News reported. The Commerce Department said yesterday that the rental vacancy rate fell to 5.8% last quarter, the lowest since the second quarter of 2020. That was down from 6.2% in the April-June period and 6.4% a year ago. The collection of data was affected by the coronavirus last year and part of 2021. The Census Bureau, which compiles the report, said the pandemic-related restrictions on data collection had ended in almost all areas in the third quarter, adding that less than 0.5% of cases were affected. In the third quarter, the median asking rent for vacant units was $1,203. That was down from $1,228 in the second quarter, but up from $1,160 a year ago. Rental vacancy rates were lowest in the Northeast and West and higher in the South and Midwest.