A multifamily lending giant has lost patience with two Metro Atlanta apartment properties and is seeking the keys.
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Arbor Realty Trust filed foreclosure notices on a $25.5M loan tied to Park Valley Apartments in Decatur and a $48.3M loan attached to The Quarry apartments in Lithonia, according to public notices published in The Champion newspaper this month.
Both properties are set to be sold at auction on the DeKalb County Courthouse steps on March 3, according to the notices.
Park Valley’s owner is listed as Park Valley Apartments LLC but is tied to a syndication group named Cash Flow Champions, Cushman & Wakefield Executive Director Nathan Swenson said. Swenson previously marketed Park Valley for sale in 2022.
Quarry Apartments LLC is listed as the owner of the Lithonia complex, which is tied to North Carolina-based real estate investment firm Four Oaks Capital.
Messages to Cash Flow Champions and Four Oaks were not returned as of publication of this story.
Messages to Arbor Realty and the law firm Reed Smith — which is representing the lenders — were also not returned.
Park Valley JV LLC is shown to have purchased Park Valley in June 2023 for $29.5M, according to DeKalb County records. Four Oaks, under the moniker Quarry FO, purchased The Quarry apartments for $53.5M in June 2023, according to records in the Georgia Superior Court Clerks' Cooperative Authority database.
Both owners obtained Fannie Mae loans at the time of purchase, according to Cooperative Authority records.
Atlanta-based M. Shapiro Real Estate Group was appointed by CW Capital on behalf of Fannie Mae as The Quarry’s receiver to operate the 415-unit apartment complex, according to documents filed with the District Court of DeKalb County.
Two experts interviewed by Bisnow said they expect more foreclosures this year as lenders finally force undercapitalized borrowers’ hands.
Michael Bull, founder of Bull Realty, said he is seeing more apartment owners either seeking distressed sales or facing foreclosure, especially among syndicators, which are groups formed with a collection of individual investors who pool money to buy properties. Those investors were lured into the Southeast and Metro Atlanta apartment markets coming out of the pandemic with shorter-term low-interest rate loans and escalating rents.
“We’ve seen a lot of that. They have only been in markets going up, up, up. And they were going up in their defense,” Bull said.
Lisa Hurd, the chief investment officer for The Radco Cos., said many of these owners lack capital to infuse in the properties, causing maintenance needs and other costs to fall by the wayside. Now, their lenders are pushing to take the properties out of their hands, she said.
“Lenders have taken the reins and said, ‘OK, we've got to do something about this,’” she said. “They’re leaving [borrowers] with limited options.”
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