Banyan Street Is Being Sued Over a Foreclosed Maryland Office While It Keeps Buying

Ladder Capital is pursuing Banyan Street CEO Rudy Prio Touzet personally for $3.6 million on a foreclosed Maryland office, even as the firm keeps buying in Atlanta and Washington D.C.

Landlord Ledger Publications • News • 2026-04-12

When a Maryland office building sells at foreclosure auction and the lender files suit against you personally on the guaranty within weeks, the calendar has a way of concentrating the mind. That is the situation facing Rudy Prio Touzet, founder and CEO of Banyan Street Capital, who in the spring of 2025 found himself navigating one of the starkest contradictions in commercial real estate: a personal lawsuit over a foreclosed suburban office building on one hand, and one of the most aggressive acquisition campaigns his firm has ever run on the other.

The Guaranty That Came Due

On March 13, 2025, Ladder Capital filed suit against Touzet in New York State Supreme Court. The complaint alleges he signed as personal guarantor on a $38.5 million loan secured by 805 King Farm Boulevard, a six-story, 240,000-square-foot office building at The District at King Farm in Rockville, Maryland. The loan was originated in December 2021 when a joint venture among Banyan Street Capital, Connecticut-based Building and Land Technology, and New York-based Green Hollow Capital Partners acquired the property.

The guaranty capped Touzet's personal exposure at $4.7 million. Ladder Capital is seeking $3.6 million of that, plus an additional $214,000 representing contractor lien costs the lender paid directly to resolve a mechanics lien on the property. The ownership entity, King Farm 4 Sub Owner LLC, defaulted by failing to repay the mortgage on a January 6, 2025 maturity date. By April 28, the property had sold at a foreclosure auction in Montgomery County Circuit Court, with an opening bid set at $500,000 against a loan that had started at $38.5 million. The sale price and buyer were not disclosed in court records at the time of reporting.

The building itself was no distressed back-alley asset. Built in 2007 and positioned in Rockville's North Rockville submarket, 805 King Farm carries amenities including a fitness center, cafe, and covered parking for 450 vehicles, with a free Metro shuttle for tenants. Nasdaq Inc., Berkshire Hathaway Home Services, and Guggenheim Investments were among its listed tenants. What it could not escape was the same structural gravity pulling down suburban office properties across the region: a maturity wall that arrived just as the market for refinancing at favorable rates had largely closed.

A Career Built on Office Scale

To understand the Ladder Capital lawsuit in context, it helps to understand what kind of operator Touzet is and how deliberately Banyan Street built itself into one of the larger office platforms on the U.S. East Coast.

Touzet graduated from the University of Miami and spent 16 years at Cushman and Wakefield, rising to managing director for the Florida area. In 1997 he co-founded America's Capital Partners, which over the next decade invested in and operated 13.8 million square feet of office properties valued at $1.9 billion across the Southeast and Mid-Atlantic. In 2009, he folded many of those assets into Eola Capital, which merged with Parkway Properties in 2011; Touzet served on Parkway's board of directors until 2012. He then founded Banyan Street Capital in 2007 and has since grown the platform to a portfolio spanning roughly 12 million square feet and valued at approximately $3 billion across Florida and the East Coast.

That resume is a long argument that Touzet knows the Southeast office market as well as anyone operating in it. The 2021 acquisition of 805 King Farm was part of a broader expansion period when suburban office assets, beaten down by the pandemic, were attracting value-add buyers who believed remote work would not permanently hollow out demand for suburban campuses. That argument has since been tested severely. What made King Farm particularly painful was not the foreclosure itself but the guaranty. When a personal guaranty is enforced, it transforms a corporate problem into a named individual's problem, which is precisely what Ladder Capital has done here.

Short Sales, Lender Losses, and Manhattan's Shadow

The King Farm lawsuit did not arrive in isolation. It came as Banyan Street was simultaneously working through the consequences of its larger New York portfolio, a collection of Manhattan hotel and office properties that at its peak carried over $1.2 billion in debt.

The most notable transaction in that unwinding was the partial sale of 180 Maiden Lane in Manhattan's Financial District. The 1.2-million-square-foot, 41-story glass tower on the East River waterfront had been acquired by a Clarion Partners and MHP Real Estate joint venture in 2015 for $470 million, financed with a $248 million Blackstone loan. The joint venture refinanced through ING Capital in 2020, taking on $372 million in debt and directing $175 million toward renovations. When that loan matured, rather than face outright foreclosure, the owners agreed to a court-ordered short sale, a process in which the lender accepts proceeds below the outstanding debt. Canadian biotech entrepreneur Carlo Bellini's real estate firm 99c purchased the building in July 2024 for $297 million, a roughly 37% discount to the 2015 acquisition price. Lenders including Wells Fargo, KSL Capital Partners, and PIMCO absorbed losses on the transaction. Eastdil Secured's Gary Phillips and Will Silverman brokered the deal.

The 180 Maiden Lane transaction illustrated a broader dynamic in the post-2022 office market: that the debt structures assembled during the 2015 to 2022 acquisition cycle have become deeply incompatible with current valuations, forcing outcomes that involve either negotiated losses or, when guaranties exist, personal liability for the signatories.

Reinvesting While Litigating

What makes the Banyan Street story genuinely unusual is the direction of the firm's capital as the Ladder Capital complaint was being filed. Rather than retreating, Touzet and Banyan were running what may be the most ambitious expansion cycle in the firm's history.

In June 2025, Banyan announced an $8 million capital improvement plan at 1250 H Street, a 199,016-square-foot office building in Washington D.C.'s East End submarket, acquired in late 2024. The upgrades are centered on a reimagined two-story lobby, a 140-person conference center called The Exchange, and three new spec suites ranging from 3,000 to 6,000 square feet. That same month, Banyan announced a $4.5 million capital improvement plan at 191 Peachtree Tower, a 50-story landmark in downtown Atlanta that Banyan owns with funds managed by Oaktree Capital Management. The plan involves renovating the building's seven-story atrium lobby, modernizing the dining spaces, and building five additional spec suites totaling more than 24,000 square feet on the 22nd floor.

Then, in July 2025, came the headline deal: Banyan Street acquired the Atlanta Financial Center from Sumitomo Corporation of America for $45 million, confirmed by Fulton County property records. That works out to roughly $47 per square foot for a 914,774-square-foot Class A campus in Buckhead. Sumitomo had paid $222.5 million for the property in 2016 and spent $15 million on upgrades, making the Banyan purchase a roughly 80% discount to the prior acquisition price. The campus straddles Georgia 400 and sits above a MARTA rail station, giving it genuine transit connectivity. Peachtree Group originated a $42 million first mortgage loan to finance the acquisition and repositioning. The Atlanta Financial Center also carried history that required no introduction: a 2022 deal to sell the property to Nightingale Properties for $182 million collapsed when Nightingale's CEO Elie Schwartz was found to have misappropriated more than $60 million raised from retail investors on the CrowdStreet crowdfunding platform, turning the AFC into the backdrop of one of the most scrutinized real estate fraud cases of the decade.

What the Duality Reveals

The Banyan Street situation in 2025 is less a story about a firm in distress than a story about what the office debt cycle has required its participants to manage simultaneously. The same interest rate environment that stranded the 2021 King Farm acquisition on a January maturity date also made it possible to buy a 915,000-square-foot Atlanta office campus for $45 million, because a motivated seller faced the same structural math from the other direction.

Touzet has now spent more than four decades operating office real estate through at least three major cycles: the early 1990s downturn, the post-dot-com correction, and the global financial crisis, each of which he navigated into the next expansion. The post-2022 office correction is different in kind, as structural demand destruction from hybrid work is a phenomenon without a clear historical precedent in the sector, but the mechanics of distressed acquisition are ones Touzet has deployed before.

The $3.6 million Ladder Capital is pursuing is, on one level, a small number relative to a $3 billion portfolio. On another level, it is a reminder that the documents signed in 2021 contained consequences that outlasted the market cycle that made them seem reasonable at the time. Personal guaranties are how lenders ensure that a bad loan becomes somebody's personal problem, not just a corporate one. In this case, that somebody has a name, a 40-year track record, and a firm still actively buying office buildings while the lawsuit works its way through the New York courts.

The office market's next chapter is being written in exactly these kinds of deals, where the same operator who absorbs a distress settlement in one city is closing a discounted acquisition in another, often within the same fiscal quarter. Banyan Street's 2025 trajectory does not look like retrenchment. It looks like recalibration: absorbing the consequences of the last cycle's debt structures while positioning for whatever recovers from the current one.