CA Ventures fumbles Illinois, Kansas senior housing portfolio

Troubled firm delinquent on $75M CMBS loan

CA Ventures Delinquent on $75M Loan Backed by Senior Housing
CA Ventures CEO Tom Scott with 219 Parkway Drive in Wheaton IL, 1865 East Belvidere Road in Grayslake, IL and 10300 Indian Creek Parkway in Overland Park, Kansas (YouTube/Secure Capital Research, Allegro Living)

Amid legal troubles and ballooning debt, multifamily developer CA Ventures is in hot water again. 

The firm’s senior housing arm is delinquent on a $75 million CMBS loan backed by three assisted living facilities in the Chicago and Kansas City metros. 

Delinquent loan payments, deferred maintenance and low occupancy are putting the properties in jeopardy, servicer commentary reported by credit ratings service MorningStar Credit indicates. Cumulatively, the three properties are 66 percent occupied, according to loan commentary.

CA Ventures CEO Tom Scott said the aftermath of the COVID-19 pandemic, high interest rates and lack of investor buy-in contributed to the properties’ troubles. He said the special servicer, CBRE Loan Services, will lead the decision-making on next steps for the property, including how and when to sell off the portfolio, which includes properties in Wheaton and Grayslake, Illinois, and one in Overland Park, Kansas. 

The loan, which matured in March, was originated by MF1 Capital. CBRE Loan Services came in last month to manage the portfolio as the special servicer. 

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CA Ventures leaders John Diedrich and Scott previously said they had planned to sell off assets as pressure and lawsuits from investors mounted last year. That includes a senior living portfolio the firm once owned via a joint venture with Goldman Sachs. The venture sold the portfolio to Ohio-based publicly traded healthcare real estate firm Welltower last year. 

Over the past year, CA Ventures began facing a growing number of legal challenges from frustrated investors. 

Canadian REIT QuadReal is suing the company, alleging that CEO Scott engaged in self-dealing while negotiating office leases at a building in River North. The company’s former COO J.J. Smith filed a lawsuit against CA Ventures, along with several affiliates, alleging he was lowballed when he tried to cash out equity in the business. In Arlington Heights, lenders are taking the firm to court over stalled progress on a separate senior housing development.

The company is fighting many of the claims, and Scott told The Real Deal in December that the pileup of legal battles are symptoms of a tumultuous real estate market rather than indicators of poor business practices. 

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