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TerraCap's Dunwoody Office Building Scheduled For Foreclosure Auction

A Florida-based real estate investment firm is facing foreclosure on a suburban Atlanta office building it purchased five years ago.

TerraCap Management's 200 Ashford Center North office building in Dunwoody.

A loan holder identified as Phoenicia Real Estate Holdings VII filed to foreclose on a $20.3M loan attached to 200 Ashford Center North, a five-story, 159K SF glass-encased office building in Dunwoody.

The building is owned by TerraCap Management affiliate Ashford Office Center LLC, according to a public notice filed in DeKalb County last week.

TerraCap paid $24.6M to purchase 200 Ashford Center in 2019 when the building was 85% occupied, according to a press release at the time. The investor highlighted its recently renovated fitness center and high-end conference center as selling points for the property.

“It’s a great property in a great location,” TerraCap partner and Acquisitions Director Steve Good said in the release. “We see it as a value-add investment with a quality and diversified roster of tenants already in place. We’re excited about the opportunity.”

NXT Capital, identified in the filing as the lender, acted as a servicing agent for the loan but transferred it to another party since then. The foreclosure proceedings are scheduled for June 4 on the DeKalb County courthouse steps, according to the filing.

Calls to TerraCap were not returned as of press time.

The debt was tied to Global Investment Fund I TRE NXT Portfolio, according to the foreclosure notice, but was transferred in April into a new entity called Phoenicia Real Estate Holdings VII to pursue the foreclosure, said Kevin Semon, a director with the special servicer SitusAMC. Semon declined to comment further on the story.

The Dunwoody building isn't the only Atlanta property TerraCap has run into trouble with. After falling behind on debt payments at Deerfield Point and Windward Pointe 200 in Alpharetta, TerraCap handed over the keys to those buildings last month to its lender, Synovus Bank, Bisnow previously reported.

The firm paid more than $47M for the two buildings in 2017, but the deed-in-lieu-of-foreclosure transaction put the transfer value of the 340K SF of office space at $23.7M. 


CORRECTION, MAY 24, 9 A.M. ET: NXT Capital is no longer the servicer of the loan and did not initiate foreclosure. The story has been updated to reflect that Phoenicia Real Estate Holdings initiated the foreclosure.