Foreclosure action prepared against Related’s CityPlace development

A foreclosure action is being prepared against CityPlace, a 756,471-square-foot mixed-use center in West Palm Beach owned by New York-based developer the Related Companies, according to a report by Trepp. Data sent to Trepp from LNR Partners, the special servicer of the $150 million mortgage, indicates that payments stopped in April, the South Florida Business Journal reported.

LNR may have CityPlace on a dual track for foreclosure and modification, Trepp analyst Spencer Hollerith said, meaning that it’s preparing to foreclose on the property while still continuing its discussions with CityPlace.

“I can’t say that foreclosure is imminent,” he said.

A spokesperson for Related told The Real Deal: “The CityPlace retail loan is not in foreclosure and any reports of impending action are simply speculation at this point. CityPlace Partners continues to work closely with the special servicer to realign the loan and ensure the continued long term success of CityPlace.”

A recent appraisal valued the property at $143 million, a drop from $225.4 million when the loan was issued in 2006. Having the loan underwater would make it difficult for the special servicer to grant CityPlace an extension without requiring more equity, Hollerith told the Journal. [SFBJ]