UPDATED: Friday, June 10th, 2016, 12:17 p.m.: Failed Los Angeles-based real estate firm BentleyForbes is planning to announce this week that it will officially dissolve as co-founder C. Frederick Wehba separates from the company.
Once a promising landlord with high-profile properties such as the Watergate office complex in Washington, D.C., and Atlanta’s tallest skyscraper, the Bank of America Plaza, BentleyForbes is now on the verge of vanishing with only three employees left and a measly portfolio of five properties, Bloomberg reported. After these assets are sold in the next 12 months, the company will dissolve.
Wehba told Bloomberg that the company’s biggest mistake was going beyond small, single-occupant buildings to large, trophy assets purchased at the top of the market. After the housing market collapsed in 2008, the latter properties sold in auctions and went into special servicing as BentleyForbes failed to keep up with mortgage payments.
For instance, BentleyForbes bought the Bank of America Plaza for $436 million in 2002, but less than six years later, it sold for nearly half the price — $235 million.
Unlike the other big landlords that suffered from the crash, such as Maguire Properties (which was acquired by Brookfield) and Harry Macklowe, BentleyForbes never recovered. Now, its troubles with creditors persist.
Reckless borrowing has also tangled the company in lawsuits. In April of last year, a Superior Court judge put Wehba’s personal assets on the line as a way of paying back Torrance-based Mitsuwa Corporation. Mitsuwa had sold two of its shopping centers to BentleyForbes, but sued when the company allegedly never paid the full purchase price, and instead sold the portfolio from underneath Mitsuwa’s feet using a maze of LLCs. Pursuant to the settlement, Wehba sold his estate at 1700 Green Acres Drive for almost $12 million in early February, The Real Deal reported in March.
Now, another complaint has been brought upon Wehba and his family — creditor Key Bank, claiming the Wehbas owe millions for leasing a private jet.
But despite his litigation troubles and the news of BentleyForbes’ timely shuttering, it’s not unlikely that Webha will discreetly remain in real estate.
In fact, former BentleyForbes managing director Gustavo Boros left to form the multifamily investment firm Metropolitan Equities earlier this year. Boros previously told The Real Deal in an email that several former executives with BentleyForbes made the transition to Metropolitan. In fact, Boros’ LinkedIn page states his place of employment as “Metropolitan Equities (formerly BentleyForbes).”
Fred Wehba and his son have both had run-ins with the law. Fred Sr. was convicted of fraud in Oklahoma in 1978 and again in 1997 in Texas for false claims and statements. As for Fred Jr., he admitted to forging the names of business associates in 1994 in the Circuit Court of Cook County, Illinois. [Bloomberg] — Cathaleen Chen
Correction: This story has been updated from a previous version to reflect that Fred Wehba Jr. was not convicted of fraud, and that he admitted, rather than confessed, to forging the names of business associates.