Bankruptcy Watch – The Bon, Boston

The Bon Morro, LLC, the leasehold owner of The Bon, a 451-unit mixed-use apartment building at 1260 Boylston Street in Boston’s Fenway, filed for Chapter 11 on November 2, 2025. According to the first-day materials, the project is held under a ground lease with Boylston Kenmore 1260, LLC as landlord.

At the same time as the bankruptcy filing, the developer also initiated an adversary proceeding against the landlord, alleging that the refusal to cooperate on refinancing precipitated the Chapter 11. Separate local reporting similarly notes the dual track of the bankruptcy and lawsuit.

Public summaries of the petition indicate a capital stack led by a $165 million construction loan (originated October 30, 2020) that was reworked in November 2023, with $162.5 million outstanding with a stated maturity of July 17, 2025. Lenders include 1260 Boylston Street Lender, LLC (administrative agent), Athene Annuity and Life Company, and Aris Mortgage Lending, LLC. There is also a $5 million subordinated loan tied to a sponsor affiliate that matured July 15, 2025. Reports indicate the property is approximately 95% occupied.

What Led to This Outcome

• Consent-dependent refinancing under a ground lease. The leasehold structure required landlord cooperation for new debt. Without pre-negotiated, objective consent standards, the landlord held effective veto power over refinancing timelines.

• Rate-reset timing risk. Debt maturities in mid-2025 coincided with a higher-rate environment, increasing carry costs and narrowing lender appetite, amplifying the impact of any consent delay.

• Complex multi-party capital stack. A senior facility with multiple institutional counterparties plus a subordinated affiliate loan added coordination challenges once maturities loomed.

• Escalation to litigation rather than structured resolution. The need to file an adversary proceeding suggests dispute-resolution pathways, such as cure windows or neutral determinations, were limited in the governing documents.

A Broader Pattern Multifamily Should Note

Urban multifamily projects delivered in 2022–2024 with ground-lease or master-lease frameworks are now approaching refinancing cycles in 2025–2027. Elevated rates and tighter capital markets mean consent friction, not property fundamentals, is often the key determinant of solvency.

The Bon’s experience, with strong occupancy but consent-driven capital stress, reflects this emerging pattern. Sponsors and lenders should reexamine ground-lease provisions and ensure SPE structures are both bankruptcy remote and operationally flexible. Where leases were written during low-rate periods, consider amending them to permit like-kind refinancing under deemed consent after defined review periods.

Final Thought

Alignment Prevents Insolvency. When counterparties share a project but not a path to timely refinancing, consent becomes a single point of failure.

Building Resilient Structures

If your pipeline includes leasehold-financed or joint-venture assets approaching maturity, it is worth pressure-testing consent mechanics, dispute-resolution triggers, and SPE governance well in advance. SPE Specialists can help evaluate SPE structuring, bankruptcy-remote design, and independent director provisions to reduce consent risk and preserve flexibility.