A Florida-based investment firm has turned the keys of a Marietta-area apartment complex over to its lender — all 228 of them.
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TerraCap Management gave back ownership of Crestmont Residences, a 228-unit complex at 500 Williams Drive, to CBRE Global Investors in a deed-in-lieu-of-foreclosure, according to a tax document filed with the Georgia Superior Court Clerks' Cooperative Authority database.
The value of the property received by CBRE was nearly $35.8M, or about $157K per unit. A deed-in-lieu-of-foreclosure means TerraCap willingly turned over ownership without going through the foreclosure process.
Neither CBRE Global Investors nor TerraCap returned messages seeking comment.
TerraCap is likely to be in good company this year as more landlords are either thrust into foreclosure with loans worth more than their properties or forced to turn over ownership to their lenders, experts say.
“I do think it’s going to be a more common story in ’26 than we’ve seen in prior years,” said Lisa Hurd, chief investment officer and president of Atlanta-based The Radco Cos. “The market is not improving in a meaningful way.”
TerraCap bought Crestmont in December 2021 for $49.9M from Independence Realty Trust, according to Cobb County property records. At the time, TerraCap described the property as a circa 1987 Class-C apartment complex that had one- and two-bedroom units. The firm planned to push up rents through “several capital projects,” including interior renovations, according to a press release.
In February 2022, TerraCap obtained a $38M loan from CBRE that was slated to mature on March 9 of this year, according to a separate document. The county assessed the property’s value at $12.9M last year, according to records from the Cobb County Tax Commissioner’s database.
This isn’t TerraCap’s first property loss in Atlanta. In 2024, Phoenicia Real Estate Holdings VII took back 200 Ashford Center North from TerraCap for $13M, a 47% drop in value from its 2019 purchase.
Multifamily is becoming a larger source of distress in the CMBS market, with distress rates reaching 11.4% in April, according to Cred-IQ. It’s a shift from the sector’s “historically low-stress profile” due to borrowers who secured floating-rate debt in the heyday of 2021 and 2022, the data firm said.
Over the past year, many owners worked behind the scenes to recapitalize their debt stack to avoid distress, said Ladson Haddow, managing partner with the multifamily analytics firm Haddow & Co. That led to fewer apartment communities in Atlanta falling into foreclosure than anticipated, he said.
While the worst of apartment fundamentals have turned a corner for the metro area — with Atlanta rents projected to jump to the second-highest market in the nation this year — that may be cold comfort for many borrowers.
“That doesn’t necessarily help the people who bought in ’21 and ’22 on a high basis with floating-rate debt,” Haddow said. “They’re the ones who are kind of feeling the pinch right now.”
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