I’ve been hearing rumblings about commercial office vacancy rates increasing in Atlanta and a few other metropolitan cities, and I’ve been curious about the impact of the vacancies. This morning the title of a Bloomberg article—“Starwood Defaults on $212.5 Million Atlanta Office Mortgage”—caught my attention, and I read it.

Starwood Capital Group is in default of its $212.5 million mortgage backed by a 29-story office building in the Buckhead neighborhood. I’m very familiar with the property: I have friends who work in this building, and I’ve been to the WeWork offices there.

Here are more details from the article:

• The mortgage originated in 2018 and matured earlier this month.
• Starwood didn’t refinance or pay off the debt.
• The property was 87% occupied in 2018. Occupancy was 62% at the end of 2022.
• Starwood and its lenders are negotiating an agreement.

Sounds like this situation is far from over. I’m curious to see how it’s resolved and if any other office buildings in Atlanta will be involved in a default.