NMS Properties’ multifamily portfolio goes to special servicing, but why?

Loan payments on Neil Shekhter-led firm’s 6 luxury properties in LA have remained current

TRD LOS ANGELES /
Aug.August 27, 2020 03:35 PM
Neil Shekhter with NMS 1548 Sixth and NMS Northridge
Neil Shekhter with NMS 1548 Sixth and NMS Northridge

As parts of the CMBS market have been rocked by the coronavirus pandemic, special servicing transfers on multifamily properties have remained few and far between. One Los Angeles apartment portfolio has recently joined the ranks of the specially serviced — but the reason for the transfer remains a mystery.

A six-property, 384-unit portfolio owned by Neil Shekhter’s NMS Properties was transferred to special servicing in late July, Trepp reported last week. A $120 million CMBS refinancing for the properties was originated by Cantor Commercial Real Estate in 2015, and later split across three CMBS deals.

“The loan is current as of August and special servicer notes were brief — so the reason for the transfer is unclear,” Trepp notes, adding that watchlist notes from prior months indicated that the borrower had requested Covid-19 relief.

Reached by phone, Shekhter said that there was no problem with the loan, and advised that questions regarding the transfer be directed to the special servicer, Rialto Capital Advisors. Rialto did not respond to a request for comment. The master servicer, Midland, does not comment on such matters.

According to Trepp data, only the largest of the three loan pieces — a $65 million note included in the COMM 2015-CR27 deal — is in special servicing. The transfer took place on July 28, and the subsequent August 6 loan payment was made on time, keeping it current.

The six luxury rental properties in the loan portfolio are the types of multifamily properties that should be relatively well-protected in an economic downturn, with tenants expected to be less vulnerable to the widespread layoffs caused by coronavirus.

The portfolio consists of two properties in Santa Monica — a 54-unit building at 1548 6th Street and a 62-unit building at 1539 4th Street; a 61-unit property at 1759 Beloit Avenue in West Los Angeles; a 79-unit property at 21021 Vanowen Street in Canoga Park; and 102-unit and 26-unit properties at 9710 Zelzah Avenue and 17089 Superior Street in Northridge.

According to a 2015 appraisal, average monthly rent at the properties ranged from $1,797 at the Zelzah Avenue property to $3,634 at 1548 6th Street. The latter property was subject to a deed restriction requiring the developer to provide 19 units of affordable housing at a nearby location, according to the loan prospectus.

Shekhter is one of Santa Monica’s most prolific developers, with a portfolio of thousands of multifamily units and several more developments in the pipeline. Shekhter’s sons Adam, Alan and Alex are the principals of a spinoff firm, WS Communities, which is also a major player in the Southern California multifamily and mixed-use development space.

Contact Kevin Sun at [email protected]


Related Articles

arrow_forward_ios
The property at 21555 Oxnard Street (Credit: Google Maps)

Anthem’s former Warner Center office building gets 75% valuation cut

Anthem’s former Warner Center office building gets 75% valuation cut
Onni Group President Rossano DeCotiis, WeWork CEO Sandeep Mathrani, and Wilshire Courtyard

Onni Group defaults on $400M Wilshire Courtyard loan after WeWork lease amendment

Onni Group defaults on $400M Wilshire Courtyard loan after WeWork lease amendment
From left: Alan, Adam, and Alex Shekhter, with renderings of 501 Broadway and 601 Colorado (Credit: WS Communities and LinkedIn)

Shekhters’ WS Communities lands $157M loan to build 850 rental units in Santa Monica

Shekhters’ WS Communities lands $157M loan to build 850 rental units in Santa Monica
Lightstone’s Eugene Rozovsky, Neil Shekhter and a rendering of 1650 Lincoln Boulevard

Lightstone provides $44M loan to Shekhter-owned WS Communities

Lightstone provides $44M loan to Shekhter-owned WS Communities
NMS Properties expands in Santa Monica with 100-unit resi complex proposal

NMS Properties expands in Santa Monica with 100-unit resi complex proposal

NMS Properties expands in Santa Monica with 100-unit resi complex proposal
Santa Monica files criminal charges against Neil Shekhter’s son for tenant harassment

Santa Monica files criminal charges against Neil Shekhter’s son for tenant harassment

Santa Monica files criminal charges against Neil Shekhter’s son for tenant harassment
In long-running legal battle, Neil Shekhter is dealt another blow

In long-running legal battle, Neil Shekhter is dealt another blow

In long-running legal battle, Neil Shekhter is dealt another blow
Neil Shekhter handed another defeat in court battle with AEW

Neil Shekhter handed another defeat in court battle with AEW

Neil Shekhter handed another defeat in court battle with AEW
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...