Mezzanine lenders are swooping in to seize control of an increasing
number of properties when owners fall behind on mortgage payments.
Fortress Investment Group foreclosed on Sheffield57, and Normandy Real
Estate Partners and Five Mile Capital spent nine months buying up
discounted debt so that they could foreclose on Boston’s John Hancock
Tower and a building in Los Angeles. In Manhattan, more foreclosures
are likely, with 130 troubled properties worth $7.5 billion, according
to Real Capital Analytics. But foreclosures are complicated because
many buildings have tiered financing, and each lender has some rights
to a building. [more]