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The Real Deal Los Angeles

AEW sells nine apartment buildings for $430.5M

Properties were subject of joint venture dispute between company and Neil Shekhter
By Cathaleen Chen | December 19, 2016 09:27AM

AEW CEO Jeffrey Furber and the LUXE at 375 La Cienega Boulevard

UPDATED, 12 p.m., Dec. 19: AEW Capital Management sold a portfolio of nine apartment buildings to Verbena Road Holdings for $430.5 million, or about $568 per square foot, multiple sources confirmed.

The much anticipated sale follows AEW’s contentious legal dispute with Santa Monica developer Neil Shekhter, a former joint venture partner on the nine properties in Culver City, West Los Angeles, and Santa Monica.

Neither Verbena nor AEW could be immediately reached for comment.

The $100 million legal battle began in 2014 when Shekhter, under his firm NMS Capital Partners, alleged he had entered a joint venture deal on the properties with AEW on the condition that he would be allowed to buy out the hedge fund’s interest after a few years, but that AEW refused to abide by those terms.

AEW counter-sued, alleging that Shekhter had forensically altered legal documents to match his claims.

In the series of rulings last month, a judge threw out Shekhter’s claims, ordering him to cede control of the properties to Boston-based AEW. The judge ruled that Shekhter had forged documents, destroyed evidence, and committed perjury in the joint venture dispute.

Seven of the nine properties are located in Santa Monica; the other two — and the biggest of the nine — are the Harlow in Culver City and LUXE in West Hollywood. The portfolio spans nearly four acres and comprises a total 415 units.

Verbena is directly affiliated with SPI Holdings, a San Francisco-based firm founded by Dennis Wong. Also part-owner of the Golden State Warriors, Wong is one of the unnamed partners who bought a stake in the Dermot Company in 2015, The Real Deal reported. The firm has significant holdings in New York City.

This article was updated to reflect that while a judge found that Shekhter had committed forgery and perjury, the ruling was not a guilty verdict.