Rialto Capital Management has gone to court to wrest control of three battered downtown Oakland office buildings after the borrower defaulted on a $111 million loan, according to court filings and industry reports. The lender is asking Alameda County Superior Court this week for permission to sell the Tribune Tower, the Financial Center at 405 14th Street and offices at 1500 Broadway, following the appointment of a receiver last fall. What happens in this case will likely decide whether the landmark Tribune Tower and its two neighbors get fixed up, traded to a new owner or sit dark for years.
According to The Real Deal, Rialto’s foreclosure suit confirms that Touchstone Commercial Partners’ Christian Diggs has been installed as receiver to operate and secure the properties. A receiver report cited in the filing describes a rough scene inside the portfolio: broken windows, flooding, asbestos, debris, illegal entries, copper wiring stripped out and people camping in the buildings. The filing also notes that the receiver and Rialto have already covered about $650,000 in past-due property taxes, with another tax bill of roughly the same size coming due in April.
The loan at the heart of the dispute was arranged in 2022 as a $111 million refinancing intended to wipe out about $91.1 million in existing debt and fund renovations, according to industry reporting. Commercial Property Executive reported that CBRE Capital Markets helped line up the financing. That floating-rate, value-add structure looked fine when leasing was healthier, but it left the portfolio exposed once demand for space cooled.
Highbridge Equity Partners, the Oakland-based owner that assembled the three-building package between 2016 and 2019, stopped making monthly payments around June 2025 and was later hit with a notice of default, earlier coverage shows. The Real Deal reported that the loan was transferred to special servicing and carried an outstanding balance of about $94.5 million as of last July. Rialto now says the unpaid balance has climbed past $100 million, according to the new filing.
Receiver Report Paints A Rough Picture Inside
A LoopNet listing for 1500 Broadway now lists Touchstone Commercial Partners as the point of contact for leasing and marketing, signaling that the receiver is already working on a stabilization and exit plan. The LoopNet page shows Touchstone handling inquiries for the block, while the receiver’s report filed with the lawsuit stresses the need for immediate security, cleanup and hazardous-material abatement. Those jobs have to come first, before any realistic sale or renovation, and they will add to the lender’s tab.
Foreclosure Fight Lands In A Brutal Office Market
Rialto’s lawsuit arrives in the middle of a broader wave of lender takeovers in Oakland’s weakened office market. As Hoodline reported when Deutsche Bank snapped up three downtown towers, an affiliate of the bank last week took title to a separate three-building portfolio through a deed-in-lieu of foreclosure, a clear sign that lenders are ready to step in directly. Industry data cited by CoStar and others show vacancy in parts of downtown Oakland has climbed into the high-20-percent range, pushing down values and leaving highly leveraged owners exposed.
What Happens Next
With a receiver already in place, the short-term focus is basic triage: locking doors, securing utilities, tackling emergency repairs and then sizing up the true cost of remediation. On the financial side, Rialto could ask the court to approve a sale, try to renegotiate the loan with Highbridge or settle for a smaller recovery through a discounted disposition. The choice will hinge on repair estimates and how much appetite buyers have for a heavy lift in this market. For nearby businesses and current or prospective tenants, the immediate question is how fast the receiver can restore basic safety and building services.
Quick Background On The Buildings
The disputed portfolio consists of three downtown properties: the Tribune Tower at 409 13th Street, the Financial Center at 405 14th Street and the office block at 1500 Broadway. Highbridge acquired the buildings between 2016 and 2019, then rolled them into the Rialto loan. Property records and marketing materials confirm the Tribune Tower’s 409 13th Street address and identify 405 14th Street as the Financial Center, matching the portfolio outlined in court and industry reports. Historical sale and property details are laid out in PropertyShark records.
Whether Rialto moves quickly to sell the buildings or holds them longer as a turnaround bet will double as a referendum on downtown Oakland’s recovery. Court filings, receiver updates and local reporting will offer the next clues as the case works its way through Alameda County and the team on the ground assesses what it will really take to stabilize the properties.
