The Denver finance company has raised the initial batch of capital for a fund that would provide debt and equity for distressed real estate and loans. The fund's focus is on providing capital - not buying assets. It will provide equity or debt to investors in distressed loans or owners of distressed properties.

Crescent Heights Inc. has agreed to acquire the 262-unit Palatine apartment complex in Arlington, Va., for $118 million from iStar Financial Inc. and Allied Irish Bank. The sale price would result in a capitalization rate of less than 5 percent - the lowest cap rate for a large District-area apartment property since 2007.

Cap rates for class-A assets with stabilized incomes in the office, multifamily, retail and industrial sectors declined or held flat last year in more markets than the number of markets in which they rose, according to analysis of investment-sales results by CB Richard Ellis.

Centerline Holding Co. has split into two businesses, selling its CMBS special servicing and asset-management operation and a 40 percent stake in itself to an Island Capital Group affiliate for $110 million. Centerline will now focus on its agency lending, tax-credit fund management business and affordable housing management operation.

The Florham Park, N.J., investor has requested that the debt encumbering 666 Fifth Ave. in Manhattan be moved to special servicing because the property doesn't generate enough cash flow to service its debt. A reserve that has been keeping the debt afloat is being whittled away and the building's largest tenant is moving out.

The Paramus, N.J., REIT said it will not "fund any shortfalls in debt service" on the $217.8 million of debt on its 2 million-square-foot High Point Furniture Mart property in High Point, N.C. Meanwhile, it said it did not make the March 1 scheduled payment on a $17.6 million mortgage on the Cannery, a 104,000-sf retail property in San Francisco.

The opportunistic investment manager bought the loan from a lending group that includes Goldman Sachs. The lending group had tried to sell the collateral property, Senate Square in Washington, D.C., through a foreclosure auction, but attracted no bids. Westbrook is expected to offer the property for sale.

Pyramid Cos. has negotiated a one-year extension for a $140 million mortgage on its Galleria at Crystal Run in Middletown, N.Y. The Syracuse, N.Y., mall owner is facing looming maturities on another $611.5 million of debt, the biggest chunk of which is secured by the massive Palisades Center in West Nyack, N.Y.

With property values well below where they were three years ago, borrowers are increasingly trying to negotiate reductions in their loan balances. But doing so could, if the cost basis of a property is less than the amount owed, trigger substantial tax hits on any forgiveness of debt.

TIAA-CREF is offering for sale $76.3 million of financing on the 506-room San Jose Marriott hotel in downtown San Jose, Calif. The debt is comprised of a $54.6 million first mortgage and $21.75 million second. The property is owned by Walton Street Capital.