Elad Group and Silverstein Properties combine substantial place-making talents at One West End, the preeminent residential tower rising at the corner of 59th Street and West End Avenue. With sales now officially launched, the 42-story building is the first and tallest condominium project to come to market within Christian de Portzamparc’s masterfully-designed Riverside Center. “One […]
Breakwater Equity Partners, a commercial loan workout and investment firm, has halted the foreclosure on 3500 Maple by putting one of the tenant-in-common owner entities into the safe harbor of bankruptcy. The special servicer is attempting to foreclose on the appreciating office building located in the Uptown/Turtle Creek submarket of Dallas, TX.
3500 Maple was purchased by 33 tenant-in-common investors in 2005 for $66.9MM. At the time of purchase, the 374,165 square-foot building was 95 percent occupied and producing a healthy income with steady dividend distributions. Many of the tenant-in-common owners were counting on the dividend distributions to supplement their retirement; they expected their investment into 3500 Maple would be low-risk and stable like a bond or a CD.
Since 2005 the building’s occupancy has dropped to 61 percent and the property’s net operating income is no longer sufficient to cover the monthly loan payments. The building was allegedly mismanaged and no new leases have been signed since 2005. The once passive tenant-in-common investors decided that forfeiting their substantial investment to the special servicer was not an option. They chose to unite and hired Breakwater to fight for their asset and keep it out of the hands of the special servicer.
Although the property value has decreased significantly, the forecasted value of the building is expected to increase substantially over the next few years. The high rise office building is in a thriving submarket; it has a nine-story, on-site parking garage and the operating expenses are expected to decline with improved property management. All of these sustainable qualities make 3500 Maple a prime target for predatory special servicers.
“We know that saving our building will not be easy,” commented Richard Pinto, a tenant-in-common investor. “We have put together a plan of reorganization and look forward to presenting our case to the bankruptcy judge. As investors, we are united and prepared to do whatever is necessary to protect our investment. Most of our investors are senior citizens who cannot afford to lose their savings.”
“We have seen this pattern over and over again,” said Phil Jemmett, CEO of Breakwater Equity Partners. “The special servicer assigned to the property relentlessly pursues foreclosure instead of negotiating new terms with the owners. Thankfully, in most cases like 3500 Maple, Breakwater is able to persuade the special servicer to come to the table. We are committed to working out an agreement for the owners of 3500 Maple and will do whatever it takes to make their asset a viable investment once again.”
Darvy Mack Cohan of Cohan Law in La Jolla, CA is the bankruptcy attorney handling this case.