Stephen Bus isn’t giving up on a deal he had to buy the Letterman Apartments building in the West Loop from the Chicago-based student housing firm that hired a broker to sell it and is now facing a $38 million foreclosure lawsuit.
Bus’ Chicago-based student housing-focused multifamily firm Up Campus Properties is suing OC Ventures, also locally headquartered, for what he claims was an improper nullification of a contract they had to buy the 482-bedroom complex at 410 South Morgan Street. Up Campus is requesting the court to force the sale even as the seller is angling to collect the buyer’s security deposit on the deal without transferring the real estate.
The property — which is adjacent to the Greektown area of the West Loop and serves University of Illinois Chicago students — and its landlord OC Ventures have been the subject of several court fights over the past year.
Up Campus brought its complaint against OC earlier this month, claiming that the seller didn’t have authority to cancel its purchase and sale agreement. The contract for Up Campus to buy the property was originally struck in April 2024 with a $52 million price.
It’s unclear if that price remains, however, as the agreement was amended 14 times before Up Campus filed its lawsuit and the latest purchase price has been redacted in the complaint. Bus declined to comment, and Erich Eisenegger, an attorney for OC Ventures, declined to comment on the suit but said that the firm has been “successfully divesting” other assets in its student housing portfolio this year.
OC Ventures sold two complexes in upstate New York this year to White Plains-based BDC Group. Local media reported the 358-bed property The Hill at Rochester sold for $27.3 million, down from nearly $36 million that OC Ventures paid to buy it in 2020, while the 640-bed Block 20 Buffalo in Amherst sold for $40.5 million, down from nearly $49 million when it last sold in 2018; however, the purchase prices differed in national media reports, with some suggesting the properties sold for a total of $90 million. BDC Group didn’t immediately return a request to clarify.
At the Rochester complex, Tan, his LLC that owned the property and other business ventures were named in a lawsuit that resulted in a $2.5 million judgement in favor of the plaintiff, which was another LLC, according to the Rochester Business Journal.
Similar situations played out at the Chicago complex, and Eisenegger’s emails, shown as exhibits in the Up Campus suit, indicate they may have led to Tan and OC Ventures pulling out of the property sale, even after hiring the brokerage Berkadia to court buyers back in 2023.
An upstate New York-based hard money lender Monroe Capital sued the OC Ventures affiliate that owns 410 South Morgan after Tan defaulted on a $6 million loan, allowing the lender to take over ownership of the property. While a Monroe representative said this week that it controlled the property for a time earlier this year, the firm transferred control back to its previous owner, the OC Ventures affiliate, in the past few weeks.
Fannie filed its foreclosure lawsuit last week claiming that Monroe’s takeover of the property — along with a legal settlement requiring a separate lender to Tan named Daili Xiao to get paid $2.5 million out of the sale of 410 South Morgan — amounted to Tan making “unpermitted transfers” under a loan agreement.
“My client does not recognize your client’s purchase agreement, as Fannie never recognized Monroe as having authority to contractually bind the Borrower,” Eisenegger wrote May 27 to an Up Campus lawyer, adding that the property sale is “null and void.”
Tan is also jousting with his former partner in OC Ventures, Steven Zhang, who was the firm’s chief investment officer but now alleges Tan is mismanaging the company and should be replaced by a receiver to help get the firm through a difficult financial period. Zhang has claimed OC’s assets — which include a handful of student housing properties across the country — are valued at $300 million, but carry $340 million in debts. Tan claims Zhang is undermining the firm by giving confidential information to creditors and third parties.
Eisenegger is also claiming that Up Campus defaulted on its purchase and sale agreement by failing to provide a loan term sheet to the seller. Up Campus is still working with lender CIBC to get financing for the acquisition, court records show.
Up Campus is still pushing to close June 27, and asking the federal court to ensure it goes through.
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