Lender GreenState Forecloses on Shaya Prager’s Office Campus

Shaya Prager has been officially kicked out of one of his suburban Chicago office properties — at least from the buildings.

A foreclosure saga at the Corporate 500 office complex in Deerfield that Prager’s firm Opal Holdings spent $178 million to buy in 2022 reached a conclusion last month, when a Lake County judge approved Iowa-based lender GreenState Credit Union’s seizure of the property through a court-ordered sheriff’s sale, public records show.

GreenState took over the four-building, 697,000-square-foot campus in a deal finalized late last month, with the discharge of a court-appointed receiver who managed the property during the foreclosure litigation. (I would note here if the deal has been finalized). The lender bought the $104 million loan note from previous lender Unify Financial Credit Union, which originated the loan to Prager’s company for the property’s acquisition before it fell into default in late 2023.

It’s unclear how much GreenState paid Unify to obtain the loan, but it traded while already facing foreclosure over Prager’s firm missing property tax payments as well as monthly loan payments owed to Unify.

A judgment amount of more than $130 million was entered in November against Prager’s borrower entities in the foreclosure case. Prager fought GreenState’s move to take over the property through a sheriff sale with some last-ditch legal motions filed late last year, court records show.

An Opal affiliate, Liberty Deerfield LLC, argued it should be allowed to file an objection to the approval of the sheriff’s sale later than the deadline the court imposed because an attorney mistakenly believed filings were due a week later than they were. It also claimed the borrowers weren’t given proper notice of the sheriff’s sale before it was held, claiming GreenState only sent a notice of the auction five business days before the sale when it’s required to give 10 such days.

The court wasn’t swayed by the Opal affiliates, however, and approved the sale in November to GreenState, which won the sheriff’s auction through a credit bid of $66 million, leaving a $64.9 million deficiency from the judgment against Shulamit Prager, who is Shaya Prager’s wife, and the Opal entities. A spokesperson and an attorney for Opal didn’t return requests for comment, while lawyers for GreenState and Unify also didn’t return requests for comment.

In a move to stabilize the asset, the credit union appointed JLL last fall as the exclusive property manager and leasing agent, with about 25 percent of the office space still available to lease after Baxter-backed kidney care spinoff Vantive agreed to rent an entire building on the campus. GreenState has committed to spending additional funds on concessions such as tenant improvement allowances to build out interior office space and leasing commissions to attract additional occupants.

With the Opal-affiliated entities officially purged from the property’s leasehold title, another challenge for the new ownership will be navigating a complex ground lease structure that defines the property — and Opal’s broader controversial strategy.

While GreenState now controls the buildings, it remains unclear if it’s obligated to continue making ground lease payments to an entity led by Katherine Cartagena, who has been a frequent deal partner in Opal’s acquisitions since 2020, often serving as the ground landlord in deals that allowed Opal to bifurcate land and building ownership to maximize leverage. The building ownership was required to make regular lease payments to the ground ownership, often on deals that span decades, as part of the transactions. The Deerfield ground rent was about $5 million annually, records show.

This foreclosure is merely one piece of a disintegrating portfolio. Prager spent billions on suburban office parks across the U.S. as well as a Wacker Drive skyscraper in downtown Chicago during an aggressive mid-pandemic shopping spree, but is now mired in litigation across the Midwest.

While the Deerfield foreclosure concludes, Prager’s broader portfolio remains in turmoil as he faces ongoing litigation from Wisconsin nursing home investors alongside a trail of foreclosures spanning the Twin Cities and Fort Worth’s Burnett Plaza.