Foreclosure Adds To Financial Woes For Once Fast-Growing Baltimore Developer
Chasen Cos. expanded rapidly after the development firm's 2017 founding with dozens of acquisitions in Baltimore, but it is now facing a series of mounting financial issues.
The latest issue comes in the form of a foreclosure filing on the historic One Calvert Plaza office tower it acquired in 2022 when it hatched plans for an apartment conversion. Lender Sandy Spring Bank last week filed to foreclose on the building after Chasen went into default on its $34M loan, the Baltimore Banner reported.
Chasen paid $11.1M to acquire the 15-story building, which was the tallest in the city when it was constructed in 1900. Founder and CEO Brandon Chasen planned to convert it into 173 apartments, and Chief Operating Officer Drew Peace told Bisnow in April 2023 the project was "an opportunity to bring life back to the CBD."
But the developer was late on debt payments starting in January and went into default in June. The following month, Sandy Spring's lawyers accused Chasen of withholding important financial information, the Banner reported.
A Chasen spokesperson didn't respond to Bisnow's request for comment.
The developer has also been hit with lawsuits this year from contractors accusing it of skipping out on hundreds of thousands in bills, the Banner reported. Patriot Steel Fabrication alleged Chasen owes it $915K. Green Apple Cleaning claimed Chasen owed it $22K and won a court ruling in July. A plumbing company also claimed Chasen had $48K in unpaid bills, and a lighting supplier claims it is still owed $40K.
The firm also owes the city $200K in unpaid water bills, with late payments on nearly every property it owns, the Banner reported.
Chasen has grown its portfolio to more than 2,000 apartments since its 2017 founding, most of them in Baltimore. It acquired about 10% of all the multifamily properties in the city's popular Fells Point neighborhood.
In 2022, Chasen was ranked the No. 7 fastest-growing company in the U.S. by Financial Times. The firm brought in $22.5M in revenue in 2022 and had a compound annual growth rate of 437%, according to FT. It was previously ranked the fastest-growing company in the D.C. Metro area by Inc. in 2020.
Chasen told Inc. in February 2020 that the firm's lending relationships and access to capital "can keep us moving through those tough times if something does happen in the market."
While it continued growing through the pandemic, the interest rate hikes that began in 2022 appear to have taken their toll on Chasen's finances. The rate on its loan from Sandy Spring grew to more than 8%, the Banner reported.
