Serenity now? Distressed debt firm buys loan on troubled luxury condo complex
Project developer faces lawsuits, liens on Beverly Hills property boasting “living wall” of plants
A distressed-debt firm bought a $25 million piece of a construction loan on a Beverly Hills luxury condo complex whose developer is being sued by a dozen contractors.
New York City-based Maguire Capital purchased the loan on the 18-unit Gardenhouse condo and retail property at 8600 Wilshire Boulevard, according to a source familiar with the deal.
The debt is part of the $40 million construction loan that Mosaic Real Estate Investors provided developer Palisades for the project in 2020. Mosaic sold a piece of that loan to a bank, which then sold it to Maguire Capital for around par value, the source said.
Gardenhouse, which opened in August 2020, includes a facade composed of a variety of plants that is touted as the “largest living wall in the country,” according to the building’s website.
MAD Architects — behind the $500 million proposed Star office tower in Hollywood — designed the Gardenhouse. Amenities include a reflecting pool, and an open-air atrium with a canopy of trees.
Despite its desire to fuse the natural world with high-end real estate and promote a sense of serenity, the Gardenhouse condo has been plagued with problems.
A dozen contractors or subcontractors have sued Palisades, alleging they haven’t been paid for their work, court documents show. A number of foreclosure liens were also placed against the property.
A Gardenhouse investor sued in federal court, alleging the developers misled him on the project’s size and timeline — the construction plan was introduced in 2015 — and charged the architect’s costs inflated the overall budget. That case was settled in July, court records show.
In 2019, a carpet company sued Palisades over unpaid work at the Liddel luxury condo development in Westwood. In that case, Carpet USA — which also sued the general contractor, Lendlease and the lender — said it was owed more than $500,000 for the job.
Palisades did not return a request for comment.
Maguire Capital, led by Marvin Azrak, is largely focused on distressed debt and special situations. The company recently provided rescue financing to a Brooklyn landlord to prevent the foreclosure of 10 apartment buildings in Williamsburg and Carroll Gardens.