A fresh dispute is heating up for control of 103-year old landmark property the Apthorp, the Wall Street Journal reported. Developer Africa Israel USA and the building’s other owners are threatening to exercise a right in their loan agreement to block a sale of the $260 million mortgage on the property by Anglo Irish Bank to Lone Star Funds.
Private equity firms Lone Star, Wells Fargo and JPMorgan Chase triumphed in a battle for Anglo Irish’s $9.5 billion portfolio of U.S. commercial real estate loans last month. Lone Star took pools of non-performing and sub-performing loans worth around $5 billion, including the Apthorp mortgage.
The ownership is preparing to take legal action, the Journal said, but the matter may still be worked out. Alternatively, Lone Star may sell the mortgage to Area Property Partners, which it beat out to win the loan at auction. Area holds a $50 million mezzanine loan on the property.
Real-estate attorneys say the owners’ right to block the sale is a rare provision in an agreement, and were shocked that Anglo Irish had okay-ed a clause that could compromise the value of the loan. [WSJ]