🚨 Debt Wall Hits Residential and Commercial
Auction supply is building and the data shows exactly where to look
In 2019, Juul paid $397 million for a 29-floor office tower in San Francisco.
It just sold for $90 million.
Madison Capital and PGIM bought the debt and are taking the building through foreclosure, and the price they paid is now the number every lender and office owner in that city has to reckon with.
Builders who spent two years offering rate buydowns and closing cost credits are now cutting prices outright, with Lennar dropping its average selling price 10% year over year to $386,000 in Q4 2025.
Underneath all of it, the foreclosure pipeline is filling, with Notices of Sale jumping 68% year over year in December across Texas, Ohio, and North Carolina.
Here is where auction supply is building and which states are moving the quickest:
In this edition of the AltReports:
🏢 Juul's Tower Sells for 75% Off
📋 Office CMBS Hits an All-Time High
🔨 Foreclosure Pipeline Accelerates Into 2026
📉 Flip Profits Hit a 17-Year Low
🏠 Builders Cut Prices for the First Time in History
Video of the Week: Home Prices About to Face MASSIVE Pressure
Chart of the Week: Office Set an All-Time Delinquency High
Podcast of the Week: The 2026 CRE Credit Squeeze: Banks Are Saying “No” While Other Lenders Say ‘Yes’!
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Foreclosure Auctions Surge as Pipeline Accelerates Into 2026
Notices of Sale jumped 68% year over year in December 2025, with 23,235 recorded nationwide as properties advance rapidly from early filings into auction-stage activity.
Texas led all states with 4,104 notices in a single month, while North Carolina more than doubled year over year and Ohio surged 75%, signaling that distress is no longer building quietly but converting into actionable inventory at speed.
Office CMBS Hits All-Time Delinquency High as Debt Wall Bites
The overall CMBS delinquency rate rose to 7.47% in January 2026, with office hitting an all-time high of 12.34% and special servicing reaching 17.11%.
The dominant driver is maturity defaults, with loans that are still cash-flowing but unable to refinance at today’s rates, creating a wave of distressed assets where borrowers are negotiating extensions rather than resolving the underlying problem.
San Francisco Office Tower Sells at 75% Discount as Price Discovery Accelerates
Madison Capital and PGIM purchased the debt on Juul’s former 29-floor San Francisco headquarters at roughly $90 million, against the $397 million Juul paid at peak in 2019, and are taking possession through foreclosure on a building that is now 87% vacant.
That transaction is the latest in a series of 60% to 80% discount sales in San Francisco, establishing a new pricing reality that lenders and owners across the market now have to mark against.
Home Flipping Profits Fall to Lowest Level Since the Great Recession
The typical home flip in 2025 generated a 25.5% return on investment, the lowest since 2008, as gross profit per flip dropped to $65,981 from $77,000 the prior year despite record home prices.
The home flipping rate fell in two thirds of metro areas and total flips declined to their lowest volume since 2020, as tightening margins and high acquisition costs push operators out of the market and reduce competition at the auction level.
Builders Cut Prices Outright as Affordability Crisis Deepens
Lennar cut its average selling price 10% year over year to $386,000 in Q4 2025, the lowest level since 2017, as nearly one in five new homes nationwide faced a price reduction.
Builders who spent two years using rate buydowns and closing cost credits to attract buyers are now competing on price directly, with the steepest cuts concentrated in Nevada, Texas, and the Carolinas where new construction inventory has been building for years.