Foreclosure Auction Set For 212-Unit Atlanta Apartment Building Acquired In 2022
The investor who bought The Optimist Lofts near Buckhead less than two years ago is on the precipice of losing the building to foreclosure.
Greenwich, Connecticut-based lender LoanCore Capital has filed to foreclose on a $48M loan attached to The Optimist Lofts, a 15-year-old, 212-unit mid-rise apartment complex off Piedmont Road next to Interstate 85.
Lc Optimist, listed as the Optimist's current owner, is an affiliate of New Jersey-based Liquid Capital, according to Georgia Secretary of State records.
The firm purchased the project from RPM Living in April 2022 for $57M, according to the Reonomy database.
Liquid obtained a $48M bridge loan from LoanCore arranged by Eastern Union for its purchase, Atlanta Agent Magazine reported, although the publication didn't identify Liquid Capital as the buyer at the time.
The loan was declared “due and immediately payable” due to Liquid Capital’s inability to make a payment on the debt, according to a foreclosure notice published on Jan. 10.
Liquid Capital didn't return calls seeking comment. LoanCore declined to comment.
Investors like Liquid Capital, who acquired apartment buildings with short-term debt during the investor frenzy of 2021 and early 2022, have been identified as sources of potential distress as they face the need to refinance their loan due to interest rates being, in some cases, twice what they are currently paying.
Already, the U.S. multifamily sector had $7.5B in outstanding distressed debt in the third quarter, with another more than $65B potentially in distress, according to MSCI. And while multifamily lagged behind office and retail properties and hotels in distress, MSCI research said many apartment loans with maturing debt have the most potential to encounter trouble in the near term, Bisnow previously reported.
Atlanta’s apartment market has been falling back to earth after reaching record levels in 2021 and 2022. Average rents fell 3.3% to $2.37 per SF in Q3 2023, according to Haddow & Co. data. The dip coincided with more than 11,500 new units under construction, 7,500 of which were set to deliver through Q3 2024.
Perhaps even more startling is the number of apartment communities at the top of the market. In 2022, 22 apartment communities were achieving rents at more than $3 per SF, according to Haddow. As of Q3 2023, that number dropped to 12.
The Optimist was built by Alliance Residential in 2008, replacing an old Ramada Inn, and at the time was known as Broadstone Piedmont. Alliance sold the complex to RMI in 2015 for $30.9M, according to Reonomy.
Liquid Capital, which owns or manages more than 2,000 units worth over $1B, according to its website, is focused on the apartment market in the South, especially Metro Atlanta.
The firm owns Crest on Peachtree and Crest at Midtown, 2460 Peachtree Apartments and The Halsten at Vinings Mountain.
The foreclosure is scheduled for Feb. 6 on the steps of the Fulton County Courthouse, according to the notice.
CORRECTION, JAN. 17, 5:15 P.M. ET: A previous version of this story identified The Fields at Peachtree Corners as owned by Liquid Capital. The firm sold that property in 2022 to 6520 Hillandale LLC. This story has been updated.
