Underscoring the deepening woes in commercial real estate, a high-profile British developer has defaulted on a $365m (€278.9m) loan for prime land it bought in Beverly Hills last year as part of a plan to build luxury condominiums.

In recent weeks, CPC Group, founded by Christian Candy of London's Candy & Candy development-management firm, has been roiled by the collapse of its partner in the project, Iceland's Kaupthing Bank, which was taken over by the Icelandic government. It also has faced a lack of construction financing as banks have pulled back from a fast-deteriorating market.