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joint venture between Rialto Capital Advisors and the FDIC has filed to foreclose on a $25 million mortgage tied to 267 Broadway in Lower Manhattan. The loan was originally issued to Roe Corporation, which defaulted in January 2023 after failing to develop a planned hotel-condo project. Signature Bank, the original lender, collapsed shortly thereafter, leaving the loan in limbo until Rialto took over servicing duties.

    Rialto has since filed at least 15 foreclosure suits against Signature borrowers, alleging defaults exceeding $300 million. The company's aggressive tactics have drawn criticism from some borrowers, who accuse it of engineering defaults to maximize profits. Rialto has also faced lawsuits alleging mismanagement and botched loan extensions.

    In one recent case, landlord MJ Orbach Associates claimed that Rialto mishandled the extension of a $65 million loan backed by an office building in Flatiron. The company allegedly dragged its feet on processing the extension, ultimately forcing the borrower to pay wrongful fees. A similar suit was settled just two weeks after being filed.

    Rialto has maintained that it is working to find the best resolutions possible for borrowers. However, critics argue that the company's actions are driven by a desire to maximize profits through foreclosure and distressed debt sales. The Rialto-Blackstone venture has already sold $247 million in loans to Maverick Real Estate Partners, which charges default interest rates up to 24 percent.