Barry Sternlicht, a billionaire in commercial real estate, has not paid $212.5 million on a mortgage for a skyscraper in Atlanta.

The Starwood Capital Group led by Barry Sternlicht has defaulted on a $212.5 million mortgage secured by an office building in Atlanta. This is yet another sign of the growing troubles in the U.S. commercial real estate market.

The mortgage on the Tower Place 100 building in the Buckhead area of Georgia's capital expired on July 9, and Starwood was unable to refinance or pay off the debt, according to a document prepared by Computershare. "The borrower has confirmed that they are unable to repay the loan upon its expiration," the document states, adding that creditors have hired lawyers and are negotiating an agreement.

A representative of Starwood, which manages assets worth over $115 billion, declined to comment on the situation.

Corporate landlords, including Blackstone Inc. and Brookfield Asset Management Ltd., have stopped payments on office buildings that they consider unprofitable, as vacancies have increased due to the rise in popularity of remote work.

The delinquency rate on office buildings with commercial mortgage-backed securities rose to 4.5% in June, up from 1.7% a year earlier, according to financing data from Trepp. Most mortgages with commercial securities are non-recourse, meaning that owners can walk away from the properties without incurring additional financial losses.

By the end of 2022, the Tower Place 100 building was 62% occupied, down from 87% in 2018 when the loan was secured. Among the largest tenants of the 29-story building is WeWork Inc., founded by Adam Neumann, which is facing financial difficulties. The vacancy rate for office space in the Atlanta area rose to 22.4% in the second quarter, compared to the national average of 20.6%, according to data from the brokerage firm Jones Lang LaSalle Inc.