A report from the Wall Street Journal. "A strong appetite among foreign investors for office buildings, apartments, malls and other real estate has in part fueled the long-running bull market in U.S. commercial property. Now, amid a maturing property market cycle and rising uncertainties in geopolitics and the global economy, foreign investors have sold more U.S. commercial real estate than they bought in a quarter for the first time since 2013."

"'For someone looking out three to five years, their investments may not be worth as much as they are today,' said Matt Posthuma, a partner in Ropes & Gray’s asset management practice. 'That’s the fear.'"

From Crain's New York Business. "Shanghai Municipal Investment Group isn't concerned about its local real estate projects, ones that might keep other developers lying awake at night. The firm has an ownership stake in Central Park Tower, a 1,550-foot-tall condominium that's just about to top out on West 57th Street, and it recently finished building a luxury apartment tower at 138 E. 50th St., where it has yet to sell a single unit."

"'I don't worry about it,' said Edward Martin, the vice chairman of the $75 billion Chinese government–owned fund's U.S. arm, referring to the moribund market for upper-tier apartments. Martin didn’t have the same optimism about recouping the millions of dollars his firm invested in another recent deal where the die has already been cast. SMI and a partner sold a majority interest in July in a condo development site at 520 Fifth Ave., taking a roughly $65 million loss on the $270 million the pair paid for the property four years ago, according to city property records—a heavy loss that is a foreboding of potentially more write-offs to come."

"'I don’t want to talk about that,' Martin said, cutting the conversation short."

"But SMI is far from alone. Lately, a growing list of foreign real estate investors, after pouring billions of dollars into major New York City real estate purchases in recent years, have found themselves in a similar financial predicament. Several made ill-timed bets on the city’s condo market—a sector that has swamped investors at home and abroad. Foreign firms, however, have appeared to take some of the steepest losses."

"Two separate foreclosure proceedings recently were begun at 125 Greenwich St., an 88-story apartment tower in Lower Manhattan that is being built by a partnership between Italian firm Bizzi & Partners Development, Chinese investment company Cindat Capital Management and domestic concerns including real estate executive Howard Lorber of New York."

"Sales were so poor at the recently completed luxury condo tower 53 W. 53rd St. that Pontiac Land Group, a real estate investment firm in Singapore that built the spire with Goldman Sachs and Hines, quarreled with its partners over who had the power to set prices for the multimillion-dollar units. Only a little more than 30% of the building’s 145 apartments have been sold, four years after sales began at the 950-foot-tall building."

"'Some of the most troubled projects in the market right now appear to have foreign sponsors,' said Jonathan Miller, CEO of Miller Samuel, a residential appraisal and analytics firm. 'Many of them came in late in the cycle, paid huge sums and now have a lot of apartments to sell in a market that is saturated with product. It’s going to be difficult to capture profits on these deals.'"

"Some observers draw parallels between the current washout and past waves of foreign investment that ended in heavy financial wreckage. The Japanese famously bought up major real estate assets in the city in the late 1980s, only to sell several of them at substantial losses a few years later during the recession of the early 1990s. One similarity between then and now is the way foreign buyers rushed into the city’s property market, paying peak values just as it was cresting."

"'The market definitely hit its peak in 2015 and has been falling ever since across property types,' said Bob Knakal, JLL’s New York–area chairman of investment sales."

From National Mortgage News on New York. "Extell Development, facing an Aug. 30 maturity for a construction loan on a Lower East Side tower — the biggest newly built tower in Manhattan by number of condos — signed an agreement for a new loan on the property, using the unsold units in the 815-apartment project as collateral."

"The New York-based developer secured a $553.5 million 'inventory loan' for the One Manhattan Square project, according to filings made this week with the Tel Aviv Stock Exchange, where it sells debt to Israeli investors. Extell also obtained a mezzanine loan of $138.2 million. The funds allow the builder additional time to find buyers for its One Manhattan Square units, which the company began marketing almost four years ago."

"'Extell is not in the business of holding units for a very long time, and this was probably not their original business plan,' said commercial real estate attorney Joshua Stein, who is not involved in the financing deal. 'When a developer gets a condo-inventory loan, it means the original plan didn't work out the way it was expected and they're obtaining new financing that better matches the sales horizon.'"

"New York's luxury developers who financed projects during a more optimistic era for high-end condos are now bumping up against loan maturities in a slowing market, with a shortage of buyers to make good on rosy repayment projections. Rather than slash prices to move inventory and meet sales milestones included in their loans, builders such as Extell are finding temporary financing solutions so they can live to sell another day."