Tricolor Scrutiny, Chicago Rental Complex Refi, and $610M of Rental Loans

Top stories in US CRE News this week:

Asset Backed Alert 12.12.25 
Tricolor ABS Investors Scrutinize JPMorgan  

A group of asset-backed bond investors represented by law firm Quinn Emanuel is asking why JPMorgan Chase continued to provide Tricolor Auto with warehouse lines and ran two of its securitizations this year despite scuttling a 2024 plan to take the company public after allegedly discovering financial irregularities. 

Separately, a U.S. trustee has directed the bankruptcy trustee overseeing Tricolor’s Chapter 7 case to require that auction houses contracted to sell the defunct lender’s fleet of 9,000 vehicles be bonded, a mandate that could delay an auction — as well as recoveries by asset-backed bondholders. The securities entered rapid amortization this week. 

Federal prosecutors and the SEC are investigating fraud allegations against the company, including claims that it double-pledged loans among its credit facilities and securitizations. As many as 30% of Tricolor’s loans may have been fraudulent, sources said. 

JPMorgan served as a bookrunner on a $217.2 million offering that priced on June 10, and a $328.1 million transaction that printed on March 11. Barclays also ran both deals, while Fifth Third Bank served as co-manager of the March offering. 

“The [Quinn] attorneys are asking why investors were sold those notes if JPMorgan had any knowledge of the fraud,” said a source. 

Tricolor already was deeply in debt and months behind on many vendor bills at the time of both securitizations, sources said. In addition to engaging Quinn Emanuel, bond investors on Dec. 3 formally asked bankruptcy trustee Anne Burns to investigate JPMorgan and Fifth Third. 

JPMorgan declined to comment. 

The bonds’ Dec. 8 acceleration of principal repayment followed KBRA’s Dec. 5 withdrawal of all of its 34 ratings on seven remaining Tricolor securitizations, with a total outstanding balance of $945.4 million, due to a “lack of sufficient collateral-performance information necessary to maintain the ratings.” 

After Tricolor’s bankruptcy filing in Dallas on Sept. 10, bond interest payments were missed for the September, October and November distribution dates, “which are unlikely to be recovered,” KBRA said. Sources said more payments will not be made until April at the earliest, if at all. Some investors expect total losses. 

Moody’s Ratings and S&P have not withdrawn their ratings on Tricolor securitizations, though both have downgraded the bonds. 

Investors had been hoping a vehicle auction would generate some recoveries, but that now may not take place until next year. “The U.S. trustee wants every single auction house to get bonded, and that could take forever,” a source said. “So they are talking to one vendor who works with all the auction houses to conduct a single auction and, if OK with the U.S. trustee, get the bond.” 

The U.S. Trustee Program is a unit of the U.S. Justice Department that oversees bankruptcy trustees. A hearing is scheduled for Dec. 18 to determine whether the vehicle sale will move forward or be delayed. 

Burns is hoping to collect $150 million to $180 million from the sale of vehicles recovered at Tricolor dealerships, mostly in Texas and California. Tricolor also has $60 million of cash on hand collected from borrower payments.  

Still, that cash and the sale proceeds would be far short of the claims made by the company’s debtors, including vendors, investors and banks involved in its securitizations. They include JPMorgan, which took a $170 million third-quarter charge related to Tricolor losses, and Fifth Third, which said it lost $200 million. 

Loan servicer Vervent, which was appointed by Burns, did not supply an initial servicer report in November, as anticipated, but is expected to complete it in the next week or so. 

Meanwhile, former Tricolor chief executive Daniel Chu and chief financial officer Jerry Kollar still have yet to be located. Neither has been seen nor heard from in public since August, when JPMorgan informed Chu that Tricolor would have to seek bankruptcy protection.  

Commercial Mortgage Alert 12.12.25 
Debt Sought to Refi Chicago Rental Complex 

The joint venture that owns the high-end Wolf Point apartment towers in Chicago is looking for $400 million of debt to refinance the complex. 

The property encompasses 1,206 units at Wolf Point East and Wolf Point West, at the confluence of the Chicago River’s three branches. The owners have started discussing the refinancing play with lenders via JLL, asking for quotes on a range of fixed- and floating-rate mortgages that could run three to seven years. 

The buildings are owned by a venture among Hines; AFL-CIO Building Investment Trust, which is advised by DWS Group; the Kennedy family; and Magellan Development. The units are about 96% occupied. 

The proceeds from the new mortgage would be used to retire existing debt with a roughly similar outstanding balance. 

Hines and its partners developed the complex on a prominent site known as Wolf Point. They first constructed the 509-unit Wolf Point West building, completing it in 2016. The 697-unit Wolf Point East was finished in 2020. 

The two buildings face each other from opposite ends of a plaza. Along the southern side of the parcel is Salesforce Tower, a 60-story, 1.2 million sq ft skyscraper that Hines completed in 2023. The partnership for that project also included the family of Joseph Kennedy and the AFL-CIO and DWS team, along with Diversified Real Estate Capital. That venture refinanced the office building earlier this year with a $610 million CMBS loan (CHI 2025-SFT). 

The Kennedy family had owned a 4-acre site at Wolf Point for a half-century when it floated plans to develop the parcel nearly 15 years ago. It teamed with its development partners to begin the project in 2014. It isn’t clear what financing the group used to construct the first building, but it obtained about $200 million of debt from a syndicate led by Bank of America to build Wolf Point East. The developers sought to refinance that loan in 2021, but it’s unclear whether a deal materialized. 

Both buildings have studio to three-bedroom units. Rents for available apartments start at $2,515 at the 48-story Wolf Point West and $2,537 at the 60-story Wolf Point East. 

The units at Wolf Point West, at 343 West Wolf Point Plaza, have floor-to-ceiling windows, stainless-steel appliances and washer/dryers. The building’s amenities include a fitness center, a steam room and sauna, a pool with cabanas, a pet spa, coworking space and a sky lounge. Wolf Point East, at 313 West Wolf Point Plaza, has many of the same features but generally is positioned as being more upscale, with some newer finishes in the units, a full-floor fitness center and an indoor/outdoor pool. 

Both towers have garages and 24-hour door staff. They are along riverfront walkways that connect to portions of the Chicago Riverwalk to the south. Vornado Realty Trust’s massive 3.7 million sq ft Mart office-and-showroom building is directly to the east.   

 Real Estate Alert 12.16.25 
$610M of Mixed-Bag Rental Loans Marketed 

Ready Capital is shopping $610 million of multifamily loans with mixed performance histories as the lender grapples with rising delinquencies, offerings that would give buyers a crack at the underlying properties. 

The accounts are split into two portfolios. One comprises 22 mortgages totaling roughly $390 million on properties nationwide, about half of which are nonperforming. All but one were originated in 2021 or 2022, with most of the underlying properties built before 1991. JLL has the marketing assignment. 

CBRE is marketing the other portfolio, which contains approximately $220 million of loans on properties in Texas. The loans have similar performance histories and vintages, likewise giving buy-siders a path to take over some of the collateral. 

Both offerings launched this month. New York-based Ready also began marketing a $101.9 million loan package this month via Mission Capital Advisors, according to sister publication Commercial Mortgage Alert. 

The largest concentrations of properties in the pool listed with JLL are in Georgia and Arizona, with the rest in states including California, Nevada and Oklahoma. 

Ready had been one of the most prolific CRE CLO issuers from 2021 to 2023, completing $6.19 billion of such offerings during that time, according to Commercial Mortgage Alert’s CRE CLO Database. And in 2023, it was the sector’s biggest issuer. 

However, many of those deals’ underlying loans financed acquisitions of value-added apartment properties that today could prove difficult to refinance due to higher interest rates. Delinquencies in Ready’s loan portfolio also have been rising, and the company hasn’t completed a CRE CLO since 2023. 

Ready said in its third-quarter earnings report that 9.8% of its loans were past due, up from 6.3% at yearend 2024. 

The lender disclosed two loan-portfolio sales in the third quarter. Those accounts had an unpaid principal balance of $758 million and sold for net proceeds of $109 million. 

Ready also has a $350 million debt issue that will mature next year. During the earnings call, officials said the company is taking a “very aggressive approach” toward reworking its balance sheet.  

Chief executive Thomas Capasse said the company has $150 million of cash and $150 million of warehouse financing versus projected debt maturities of $425 million to $450 million. “That will be supplemented by additional senior and unsecured issuance as well as asset sales to plug the gap,” Capasse said, pointing to $800 million of unencumbered assets.