TA Partners defaults on $200M in loans tied to Irvine apartments

Developer planned to build 658 units with Mack Real Estate financing

Irvine Developer TA Partners Defaults On $200M in Loans Tied to Apartment Projects
Mack Real Estate Group's Richard Mack and TA Partners' Johnny Lu and Larry Liu with 18831 Von Karman Avenue (Getty, TA Partners, Google Maps)

TA Partners has defaulted on almost $200 million in loans tied to two apartment projects in Irvine, less than two years after the debt was handed out, The Real Deal has learned.

TA is delinquent on payments totaling $11 million under the two loans as of Oct. 1, according to two separate notices of default filed with Orange County. The firm, based in Irvine and run by Johnny Lu, did not respond to a request for comment. 

Mack Real Estate Credit Strategies provided two senior loans totaling $197 million in 2022, records show. Mack declined to comment. 

Under state rules, a foreclosure can be scheduled 90 days after an initial notice of default is filed, meaning Mack could schedule a foreclosure for Jan. 4. 

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The loans were part of a $262.5 million debt package from Mack, to be used to finish construction of 658 units across the two projects, Meridian Capital Group, which brokered the debt, announced last year. 

TA planned to build the two complexes at 18831 Von Karman Avenue and 17422 Derian Avenue. Mack’s loans were supposed to help TA finish construction without contributing additional equity, according to Meridian. 

The loans were set to mature in 2027. 

It’s unclear whether the loans were floating-rate, but were given out in February last year, before the Federal Reserve hiked rates seven times over the course of 2022. 

Rising debt payments plus construction overruns have forced a number of developers to default on their loans. In August, TPG foreclosed on a Sandstone Properties-owned apartment project in the L.A. neighborhood of Westchester, after Sandstone defaulted on an $81 million loan tied to the development.