Bulk Sale Of Shvo-Owned Mandarin Oriental Units Planned In LA After $200M Default Notice
The 44 remaining available condo units at the Shvo-owned Mandarin Oriental Residences Beverly Hills will go up for bulk sale Wednesday after the project's lender filed a notice of default.
Acore Capital filed the notice last month with the county of Los Angeles, preserving its right to foreclose on the property. The notice, dated Aug. 21, says that the amount due is just over $200M.
The bulk sale will also include about 6K SF of retail space.
The Mandarin Oriental Residences are owned by New York developer Michael Shvo's eponymous firm, Deutsche Finance and a group of German pension funds.
"The ownership group had arranged financing with JP Morgan but chose instead to work with the lender to market the remaining units in a bulk sale," a spokesperson for the ownership group told Bisnow in statement.
The bulk sale "allows the partnership to re-allocate investment resources to purchase new income producing assets, in anticipating of a lower interest rate environment," according to the spokesperson.
The units for sale range from one-bedroom units to four-bedroom penthouses and average about 2,600 SF, according to marketing materials set for release on Wednesday and reviewed by Bisnow.
The sale at 9200 Wilshire Blvd. is overseen by a Newmark team led by Adam Spies and in coordination with the lender, according to the spokesperson.
The Mandarin Oriental was completed in May and has sold 10 units at an average of more than $3,200 per SF, the spokesperson said. A March promotional event for the property revealed prices started at $3.7M for a unit, the Real Deal reported at the time.
No prices were disclosed for the units offered in the bulk sale.
Shvo and Deutsche Finance secured a $190M loan for the project from Acore Capital in 2019, the same year Michael Shvo bought the property for $130M, public records show.
Acore did not respond to a request for comment.
Shvo's signature is ultra-luxury, but reports from projects across the country indicate that the buyer pool for such properties is shallow. A 69-unit Mandarin Oriental-branded project in Manhattan that Shvo and partners acquired last year had sold only 14 units as of June, Bisnow previously reported. Two more were under contract at that time.
Elsewhere in California, the Shvo team is preparing for the reopening of San Francisco's iconic Transamerica Pyramid Sept. 12. Shvo and German financing partners have completed $400M of renovations to the property with the goal of enticing high-end office tenants. A would-be tenant of the pyramid has filed suit against the ownership group over alleged construction delays.
In Miami, Shvo's firm laid off staffers despite having two projects in progress in the area, Bisnow reported in August.
UPDATE, SEPT. 3, 6:11 P.M. PT: The story has been updated to reflect additional information about potential financing for the project.
