Wells Fargo Forecloses on Crestlight Capital Atlanta Portfolio

Crestlight Capital is facing foreclosure on an office and retail portfolio on Atlanta’s West Midtown and Upper Westside after defaulting on an $84 million loan.

The loan, which matured in October, was tied to assets including Puritan Mill, at 950 Joseph East Lowery Boulevard; Ellsworth Office Lofts, at 1510 Ellsworth Industrial Boulevard Northwest; Complex West Midtown, at 1175 Chattahoochee Avenue Northwest; and Inland Tract, at 1236 Menlo Drive Northwest, the Atlanta Business Chronicle reported.

The portfolio spans about 360,000 square feet, and tenants include Michelin-star restaurant Bacchanalia, Star Provisions and Bold Monk Brewing.

Lender Wells Fargo filed for foreclosure after the Detroit-based firm failed to make the required payment. The bank has already taken control of the properties, and tenants are not expected to be affected immediately by the foreclosure, but it could reopen lease negotiations.

The foreclosure auction is scheduled for March 4.

Some of the properties are near sections of the Atlanta BeltLine’s Northwest Trail.

Crestlight Capital purchased the portfolio in September 2021 for about $114 million. The deal worked out to $316 per square foot. J.P. Morgan Global Alternatives advised the transaction. Crestlight and its attorneys didn’t respond to a request for comment.

The four properties were acquired when interest rates were relatively low. However, as market conditions changed and office vacancy rates rose, the firm’s investment began to struggle.

In particular, the West Midtown market has seen significant challenges. The submarket’s office vacancy rate reached nearly 50 percent in the fourth quarter, making it the hardest-hit office market in metro Atlanta, according to CBRE.

— Andrew Terrell