Two suburban Alpharetta office buildings owned by a Mexico City-based investment firm are scheduled to be sold at a foreclosure auction next month.
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The owner of Windward Oaks I and II — two mid-rise, brick-clad office buildings totaling more than 135K SF at 5895 and 5897 Windward Parkway — has defaulted on mortgage payments at the buildings, which are encumbered by a $202.2M loan, according to a foreclosure notice published in the South Fulton Neighbor on July 17.
Bank of America holds the note tied to those buildings and has scheduled the foreclosure auction for Aug. 6. The borrower, OME Windward Oaks LLC, is tied to Aztec Funds out of Mexico City, according to Real Capital Analytics information obtained by Bisnow.
Aztec Funds didn't respond to a message seeking comment before publication. Troutman Pepper associate Robert Kennedy, who is listed as the attorney for Bank of America in the notice, didn't return calls seeking comment.
SK Commercial Realty principal Tom Parker, who leases the building for the landlord, declined to comment.
Windward Oaks I at 5895 Windward Parkway is a two-story, 59K SF building that is 96% leased, with Primetals Technologies its biggest tenant at nearly 30K SF, according to a CoStar report obtained by Bisnow. Windward Oaks II at 5897 Windward Parkway is a three-story, 77K SF building fully leased to logistics supply company CHEP for its North American headquarters, according to the report.
Aztec Funds purchased both buildings in 2019 for $23.6M from Stockbridge Capital Group, according to Fulton County property records. In March 2023, the firm refinanced its loan on at least Windward Oaks II with a $195M Bank of America loan, according to the Reonomy property database.
Fulton County valued Windward Oaks I at $8.8M and Windward Oaks II at $8.3M this year, so other real estate assets are likely bundled together in the overall Bank of America loan.
According to its website, Aztec Funds has focused on buying and operating office buildings in the U.S. in the past six years, buying more than $600M.
"We currently manage our first fund, 'The Aztec Fund' and, due to the good results, we are building the second 'OME,'" the company said on its website.
In 2018, Aztec Funds, headed by president and CEO Charles Haddad, bought the 313K SF Westway Plaza trophy office building in Houston from Transwestern Development Co. for $88.6M, according to Reonomy. The firm has purchased other assets in Dallas, Denver and Pittsburgh.
The Windward Oaks campus is another example of U.S. office buildings facing financial difficulties, with $260B in office loans set to mature by the end of 2026, according to a report from CommercialEdge. Nearly half of office loans in Metro Atlanta, have matured or are slated to mature in the next two years, the largest proportion of any major market.
And while banks have been largely seen as willing to work with borrowers to avoid taking control of obsolete properties, more financial institutions are taking that step.
Synovus Bank in April acquired Deerfield Point and Windward Pointe 200, two office buildings totaling 340K SF just 2 miles north of the Windward Oaks office complex. The transaction, a deed-in-lieu-of-foreclosure, was valued at $23.7M, a nearly 50% drop from what the previous owner, TerraCap Management, paid for the properties in 2017.
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