GSN Roundup: Blackstone and Willis Tower, JV’s Big Data Center Refi, and Prestige Closing

Top stories in US CRE News this week:

Asset Backed Alert 01.16.26
Prestige Closing Tied to MLB-Franchise Push

The Nov. 20 shuttering of Prestige Financial Services’ auto-loan origination business was tied in part to an effort by its owner to bring a Major League Baseball team to Salt Lake City.

The move initially appeared to reflect a straightforward decision by Larry H. Miller Co. based on growing delinquencies and losses within Prestige’s subprime-loan portfolio, a large portion of which the company had funded through securitization. But sources say there’s more to the story, specifically as it pertains to a push by Larry H. Miller Co. chief executive Gail Miller to land one of two expansion teams that could be in place for the 2029 season.

With the expansion fee alone expected to top $2 billion, the privately held company has been working to line up funding for the purchase and for a new stadium. At the same time, Prestige’s focus on borrowers with histories of bankruptcy brought about weakening loan performance that weighed enough on its balance sheet to require a capital injection from its parent to stay afloat.

As such, Larry H. Miller Co. executives identified the situation as an impediment to Gail Miller’s campaign.

Via Larry H. Miller Co. and other entities, the Miller family formerly owned the NBA’s Utah Jazz and currently owns Major League Soccer’s Real Salt Lake and the Salt Lake Bees, a minor-league baseball team. The push for an MLB franchise began in 2023, when Gail Miller formed a group called Big League Utah that has been laying the groundwork to land a current or expansion team.

MLB is expected to announce selections for expansion teams by 2028, with Salt Lake City in contention with Portland, Ore., for a Western U.S. franchise, and Nashville, Orlando and Raleigh in the running in the East.

“Prestige was bleeding too much money, and they just decided to shut it down,” a source said. “Its owner has been trying to get a baseball team, and this wasn’t helping.”

Larry H. Miller Co. founded Prestige in 1994. The Draper, Utah, lender launched its securitization program in 2001 and went on to complete 25 such deals totaling $6.7 billion, culminating with a $202.5 million issue led by JPMorgan Chase and Wells Fargo on April 24, according to Asset-Backed Alert’s ABS Database.

While that deal’s collateral is performing as expected, offerings from 2021 and 2022 have booked higher-than-forecast delinquencies and cumulative net losses. For example, net losses in a $378.3 million transaction from October 2022 reached 30.2% in November versus a projection of 15.7%, according to Morningstar DBRS, which graded the bonds alongside S&P.

Despite the poorer-than-expected loan performance, S&P and Morningstar have said the halting of Prestige’s originations will not negatively affect ratings across the seven securitizations, dating from 2021 to 2025, that the company still has outstanding.

Commercial Mortgage Alert 01.16.26
JV Wants Big Loan To Refi NoVa Data Center 

An Affinius Capital partnership is looking for a $925 million mortgage on one piece of a data-center complex it’s developing in Northern Virginia.

Affinius and Corscale Data Centers are talking to lenders about a debt package to refinance the second phase of the Gainesville Crossing Data Center Campus. Their preference is for a floating-rate loan with a term of two to three years. Newmark is advising on the deal.

The collateral is a fully leased, 482,000 sq ft building with 72 megawatts of power capacity that was completed last year. The tenant, which hasn’t been publicly identified, is a large, cloud-computing provider that’s signed on to lease it for an initial term of 15 years.

The property, in Gainesville, is part of a planned five-building complex that eventually will offer an aggregate 306 megawatts of capacity. It is near the junction of U.S. Route 29, also known as Lee Highway, and Interstate 66, 30 miles west of Washington. The property has used the address 13700 University Boulevard.

Locally based Corscale and Affinius’ predecessor firm, USAA Real Estate, bought the 130-acre site from Buchanan Partners in mid-2020 for a price pegged at $74.5 million. Buchanan apparently had planned to develop residences there, and had secured at least initial approvals, but switched gears as a wave of data-center construction in Northern Virginia began to build. The land was rezoned to allow for that use in late 2019.

Corscale is the data-center investment arm of Houston-based Patrinely, which formed the unit as it began development of the Gainesville project, its first large-scale move into the sector.

Northern Virginia is seen as one of the largest data-center markets in the country, measured by the amount of approved power supply and the availability of real estate geared toward development.

Real Estate Alert 01.20.26
Blackstone Weighs Options for Willis Tower

Blackstone has been mulling options to exit its ownership of Chicago’s Willis Tower, setting the stage for what could be among the highest-profile retreats in the beleaguered office sector.

The fund behemoth in recent months has contacted select investors large enough to assume a $1.32 billion securitized loan on the 3.8 million sq ft property. Eastdil Secured has been leading those talks, sources said, though the status of the effort is unclear.

The property’s most recent appraisal, a year ago, pinned its value at $1.4 billion.

Willis Tower is by no means a distressed property. Blackstone has boosted occupancy and revenue amid $670 million of renovations, and last year secured a loan modification that extended the floating-rate mortgage to March 2028 with two one-year extension options.

The property is generating enough cashflow to cover debt service, according to servicer reports.

The question for Blackstone is whether to continue pumping more capital into the property, which despite its gains still is underperforming underwritten stabilized goals, sources said.  While the firm declined to comment on a possible sale, a spokesperson emphasized the property’s recent improvements in leasing and other revenues.

“We believe Willis Tower’s transformative renovation has positioned it for success, as demonstrated by over 600,000 sq ft of leasing in the past two years and more than 1.2 million annual [Skydeck Chicago] visitors,” the spokesperson said, referring to a 103rd-story viewing platform that generates significant revenue at the skyscraper.

Blackstone paid $1.30 billion for the West Loop tower in 2015, assuming another securitized loan at the time. The firm then spent $200 million on an initial round of renovations to the building’s office space, including tenant improvements, plus retail components and an expansion of the Skydeck.

In 2018, Barclays and Deutsche Bank originated the current loan on the property and securitized the debt in a single-asset deal (BBCMS 2018-TALL). The building was appraised at the time at $1.78 billion. Blackstone spent another $470 million on improvements through 2022, including building a new 300,000 sq ft retail, dining and entertainment space dubbed Catalog. Recently signed tenants there include one of the city’s only Van Leeuwen Ice Cream shops and Cava.

Meanwhile, after several years of tenant defections and downsizing during the pandemic, leasing momentum has improved. The last 24 months brought an uptick in new and renewed leases from tenants including Adtalem Global Education (84,000 sq ft) and Zurich North America (52,000 sq ft). The property was 84% occupied at the end of September.

Revenue from the Skydeck, meanwhile, grew 15% in 2025 from the year before.

Yet at the same time, expenses continued to rise. Interest-rate volatility, for example, caused fluctuations in the mortgage’s debt service, which in 2024 totaled $91.4 million versus $66.4 million in 2018. Real estate taxes in the first six months of last year were $58.1 million, 67% more than the underwritten amount at origination.

The upshot: While cashflow is at or above the goal underwritten in 2018, the debt-service coverage ratio – a measure of a property’s ability to cover debt payments – has worsened. Through the first nine months of 2025, that measure was 1.66 to 1 versus an underwritten amount of 2.42 to 1.

Willis Tower, formerly known as Sears Tower, is a quintessential piece of Chicago’s skyline. The 110-story tower was the nation’s tallest building upon its completion in the early 1970s. It occupies a full city block at 233 South Wacker Drive.

Blackstone has been gradually whittling away its traditional office holdings over the last five years, as the sector took a beating from a lack of leasing demand and an uncooperative debt market. An office tower the firm owns in Seattle, for example, currently is on the selling block with an estimated value of $300 million, down 50% from its peak price.

Overall, office values remain an average of 35% below 2022 levels, according to Green Street’s Jan. 7 Commercial Property Price Index.