Another lender is closing in on Shaya Prager, this time in pursuit of nearly $106 million it says it’s owed in connection with debt Prager’s firm took out against a suburban Chicago office complex.
A venture of New York-based Opal Holdings and Prager’s wife, Shulamit Prager, were named in a lawsuit filed in December by Unify Financial Credit Union. It claims that they failed to pay property taxes for the four-building, 697,000-square-foot Corporate 500 campus in Deerfield. The Opal venture bought it for $178 million, over $255 per square foot, in 2021. The deal was funded in part with a $104 million loan from Unify.
While the lawsuit was filed in Lake County court in December, the lender only convinced the court last month to appoint a receiver to take possession of the property, at 500-540 Lake Cook Road, and manage its finances while the foreclosure dispute plays out in court. The lender early this month recorded lis pendens — a document indicating there’s litigation over the ownership of a property in its chain of title — against the parcel.
The Opal venture has filed a motion to dismiss the suit, indicating it will fight Unify’s attempted takeaway. It also tried to stop the appointment of a receiver, but the court found the borrower to be in default and ruled to appoint Keelee Leyden of Cushman & Wakefield as receiver.
Attorneys and a spokesperson for Opal and its ventures tied to the property didn’t return requests for comment. An attorney for Unify declined to comment, while an attorney for Leyden was unavailable.
Unify’s foreclosure lawsuit was filed amid a swelling wave of legal trouble engulfing Opal. It has been hit with foreclosure suits on a massive Minneapolis-area office campus as well as Fort Worth’s tallest tower — the office building known as Burnett Plaza — after allegedly defaulting on more than $100 million in loans for those properties. Prager’s firm also faces accusations of duping lenders into letting his firm double-dip on debt.
With many of the office properties that Prager’s firm bought amid a $2 billion shopping spree from 2020 to 2022, it was able to take out a mortgage based on its interest in the underlying land of office buildings, while ground lessor entities — that in some cases were allegedly related to Prager’s firm — took out out mortgages for similar dollar amounts against the leasehold interest, or the improvements and buildings on the land. Together, the loans can add up to more than the purchase price of the property. Opal employed the ground lease strategy in Deerfield, as well.
Furthermore, preferred equity investors in Opal Holdings deals in June also sued Shaya and Shulamit Prager in New Jersey, alleging they’re owed nearly $10 million by the couple and its business.
The Deerfield foreclosure lawsuit is playing out after the property’s largest tenant, heavy equipment manufacturer Caterpillar, moved its corporate headquarters to Fort Worth, Texas, in 2022, and then later sought to sublease 116,000 square feet of its former headquarters office at the Corporate 500 campus.
But Caterpillar’s lease was supposed to run through at least 2025, meaning the firm is likely still on the hook to pay rent to Opal, unless it had paid a termination fee to exit the deal early. The space is still being marketed for sublease by Cushman & Wakefield.
This is a developing story.
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