The future of nine Westside rental properties which recently sold for $430.5 million is now uncertain, thanks to an appellate court ruling Tuesday that suspends AEW Capital Management’s sole control of the portfolio.
The latest decision halts a court order that stripped Santa Monica developer Neil Shekhter of control over the buildings, for which he was a joint venture partner with AEW.
Barely a month after the court order was issued in November, AEW sold the disputed properties to Verbena Road Holdings, a subsidiary of San Francisco firm SPI Holdings.
AEW’s attorney, James Fogelman of Gibson Dunn & Crutcher, said in a statement that the appellate court order would have “no impact…on the sale of the properties last month,” the Los Angeles Business Journal reported. He expects the original court order to be upheld.
A third lawsuit could also impact the fate of the portfolio. Shekhter, under his company NMS Properties, filed a lawsuit earlier this month alleging that AEW was illegally selling the properties to SPI. Both AEW and SPI are named in the suit.
The saga began in 2014, when Shekhter alleged that AEW violated terms of their joint venture agreement. AEW counter-sued, alleging that Shekhter had forensically altered legal documents to match his claims.
Last month, a judge threw out Shekhter’s claims. In addition to ordering him cede control of the nine properties, the court ruled that he had forged documents, destroyed evidence and committed perjury. [LABJ] — Cathaleen Chen