1.2M SF Suburban Atlanta Office Portfolio Sold In Foreclosure

A huge swath of office space outside of Atlanta owned by a bankrupt Canadian real estate investor has been seized in foreclosure.

The properties were tied to a $350M CMBS loan provided to Adventus Realty Services. Wells Fargo, acting as trustee for the CMBS bondholders, initiated the foreclosure action and took control of the properties on Dec. 3, the Atlanta Business Chronicle reported.

The foreclosures covered five office properties and 10 buildings in Kennesaw, Alpharetta and Cumberland/Galleria. The CMBS loan also covered three office buildings in the Chicago area, although those don't appear to have been included in the foreclosure sale.

The foreclosure was "anticipated" this month, according to commentary from special servicer KeyBank recorded in the Morningstar Credit database. Adventus took out the loan in July 2021 for the 2.2M SF portfolio from Column Financial, which sold the debt into a CMBS trust. 

Vancouver, British Columbia-based Adventus last made a payment on the loan in March 2023, according to a lawsuit filed by Wells Fargo on behalf of the CMBS trust. A receiver was later appointed to handle the operations of the building after Adventus filed for bankruptcy in July 2023.

The properties that sold in foreclosure are:

• The three-building, 315K SF Barrett Lakes office park near the intersection of Ernest W. Barrett and Cobb parkways in Kennesaw.
• The four-building, 350K SF TownPark Commons off New Chastain Road and sandwiched between Interstates 75 and 575 in Kennesaw.
• The six-story, 162K SF Milton Park at 30000 Mill Creek Ave. in Alpharetta.
• The 10-story, 213K SF 1000 Parkwood Circle off Powers Ferry Road in the Cumberland/Galleria submarket.
• The six-story, 155K SF 1600 Parkwood Circle office buildings, also off Powers Ferry Road in the Cumberland/Galleria submarket.

Bisnow reported in February that the appraised value of Adventus’ Atlanta properties fell an average of 24.4% since 2021, with the eight-property portfolio's appraisal dipping from $439M to $279.9M.

The combined value of the foreclosure deeds filed in public records was almost $253M, the ABC reported.