Westdale America: How Much Real Room Is Left in the Series C Collateral?
The main article already flagged 84.89% as Westdale’s tightest credit bottleneck. This follow-up maps the three Series C assets, shows how little room remains before the 85% line, and explains why formal compliance still falls short of real refinancing room.
The main article already showed that Westdale’s most sensitive number is no longer the revenue line but the 84.89% Series C collateral test. This follow-up isolates that number: what sits underneath it, how the value is split across the three pledged assets, and how much actual room remains before the discussion shifts from valuation noise to coupon pressure.
This is not a theoretical security package. Series C benefits from first-lien mortgages on the three pledged properties, assigned rights and cash flows, guarantees from the property entities, and pledges over the equity interests in those entities and the trust account. So the issue here is not weak legal security. The issue is economic: when the reported ratio stops at 84.89%, the real question is no longer whether collateral exists, but how much value truly remains above the debt.
The Three Assets, Not the Same Risk
At first glance, 84.89% looks like one ratio. In practice, it sits on top of three very different assets. Woodmeade is a seasoned multifamily asset with relatively high occupancy. Colonnade is an office building that improved, but still carries near-term rollover risk. Epic Office 1 makes up almost 60% of the collateral pool, and it is also the asset with the largest gap between current value and stabilized value.
| Asset | Asset type | Occupancy in appraisal | Fair value at year-end 2025 | Share of collateral pool | What really matters |
|---|---|---|---|---|---|
| Woodmeade | Multifamily, 304 units | 90.5% | $40.4 million | about 26.0% | The relatively stable asset, but it still fell from $42.1 million in 2024 because rental rates weakened and expenses increased |
| Colonnade | Office, 168,255 sf | 82.4% | $22.0 million | about 14.1% | Operating improvement and positive revaluation, but still near-term rollover risk, and the appraisal also notes a Truist lease termination effective December 31, 2025 |
| Epic Office 1 | Office, 282,873 sf | 45.9% | $93.1 million | about 59.9% | The dominant collateral asset, but also one whose value still depends on forward lease-up rather than already-delivered stability |
The practical implication is straightforward. Colonnade and Woodmeade matter, but Series C is functionally an Epic Office 1 story first. Once nearly 60% of reported collateral value comes from one asset, the collateral test stops being a diversified average and becomes a very sensitive read on the direction of that dominant asset.
How Much Room Is Actually Left Before Coupon Pressure
The year-end 2025 collateral test is simple on paper. The liability value of Series C stood at $132.3 million. Against that, there were only $0.3 million of deposits or financial collateral to offset. Set against those two figures, the company reports collateral value of $155.48 million, producing the reported 84.89% ratio against an 85% threshold.
The most important detail in that table is not the fact that the threshold was still met, but the footnote: failure on this metric is not an immediate acceleration event. It may instead trigger an interest-rate adjustment. In other words, moving above 85% is not a formal default event, but it is still a financing-cost event and a negative signal to the debt market.
What matters most is how narrow the room is. Based on the reported test values, only about $0.2 million of erosion in the collateral pool is enough to move the ratio above 85%. That is barely any room at all. This is not a collateral package that can absorb another ordinary valuation move and remain indifferent.
| Scenario based on year-end 2025 values | Calculated collateral value | Loan-to-collateral ratio |
|---|---|---|
| Reported figure | $155.48 million | 84.89% |
| $0.2 million decline in the total pool | $155.28 million | 85.01% |
| 5% decline in Colonnade alone | $154.38 million | 85.50% |
| 5% decline in Woodmeade alone | $153.46 million | 86.02% |
| 5% decline in Epic Office 1 alone | $150.82 million | 87.52% |
This table does not predict future appraisals. It simply shows the elasticity of the ratio using the covenant formula itself. And that elasticity is very aggressive. Even a relatively small move in one asset is enough to push the ratio above the line that matters for interest adjustment.
Where the Real Risk Sits
Almost the entire economic discussion comes back to Epic Office 1, and for good reason. Its appraisal stands at $93.11 million, but the same appraisal also shows a stabilized value of $145.88 million for 2030. That roughly $52.8 million gap means the appraiser clearly sees upside, but that upside is not yet sitting in the bondholders’ current collateral value. The asset ends 2025 at 45.9% occupancy, with roughly 67,000 square feet of shell space still requiring tenant-improvement capital, and with the appraisal explaining the value decline through shorter lease terms, lower-than-modeled rents, reduced Regus rent, and weaker parking-income expectations.
That is exactly where formal compliance has to be separated from practical room. Formally, Epic Office 1 is already inside the collateral package, which is why the company still meets the test. Practically, nearly 60% of the package rests on an asset that is still deep in a reletting story. So any further slowdown in leasing, any tenant signed below plan, or any need for more concessions can move very quickly from a valuation line item into a funding-cost question.
Colonnade looks better, but there is still not much surplus here either. On the positive side, this is the bright spot inside the package: occupancy reached 82.4%, value rose to $21.97 million from $19.51 million, and the appraisal attributes the improvement to positive absorption and higher rents. On the other hand, the same appraisal still flags near-term rollover risk, and its stabilized value is only $24.01 million. So even if Colonnade keeps improving, it does not create a large new layer of excess value above today’s mark. In addition, the appraisers’ summary letter states that Truist Bank executed a lease termination agreement effective December 31, 2025. That does not necessarily break the asset, but it does show that the improvement still needs to prove durability.
Woodmeade is the relatively stable anchor in the package. Occupancy there is 90.5%, and the appraisal rests on a multifamily asset rather than an office building. But that is exactly why its drop to $40.4 million matters. The appraisers attribute that decline to lower rental rates and higher expenses. In other words, even the calmer part of the package did not widen the cushion. It narrowed.
That is why the Series C conversation cannot stop at the phrase “the company is still in compliance.” It is in compliance, but almost without room. The multifamily asset already lost value, Colonnade improved but still does not create a large surplus layer, and Epic Office 1 is both the largest asset and the one where the heavy lifting is still ahead.
Bottom Line
Series C is secured, but not comfortably secured. The legal strength of the collateral package is clear. What is missing is economic headroom. The 84.89% figure says that at year-end 2025 the company is still inside the framework, but almost without a real buffer between reported value and the 85% line that can start pushing coupon costs higher.
That means the right lens from here is not simply “is there collateral,” but “how much of that collateral is already stable today.” Woodmeade is a base, but not one that is expanding. Colonnade is improving, but still has to hold the gain. Epic Office 1 is the possible value engine, but for now it is also the main source of sensitivity. As long as that remains true, formal compliance with the indenture does not automatically translate into practical financing room or comfortable refinancing optionality.
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