Mezz lenders foreclose on more buildings

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.