The Distress Record: Greenland USA’s Pacific Park troubles, FMB files for Chapter 11

Ten years after breaking ground, Greenland USA is set to lose control of its $5 billion Pacific Park megaproject in Brooklyn. 

The firm defaulted on $350 million in loans that cover the six incomplete sites at Pacific Park (out of 15 project sites in all) that are slated for more than 3,200 units — if they are ever built. 

The auction is scheduled for Jan. 11.

Greenland — a subsidiary of China’s state-owned Greenland Group —  bought a 70-percent stake in 2014 in what was then Atlantic Yards from Forest City Ratner, which proposed the project in 2003.

A 2025 deadline looms for Greenland to build the affordable housing component of the project. 

In Los Angeles, FMB Development’s ambitious apartment project in Van Nuys has gone from defaulting on a loan to filing for bankruptcy. The Chapter 11 protection aims to address mounting debts and financial challenges, with liabilities ranging from $10 million to $50 million.

FMB has owned the land since 2018, when it paid $9.5 million for the roughly 1-acre site, according to property records. It planned a six-story apartment building with ground-floor retail. 

In Houston, a lender has taken steps to foreclose on  264-unit Retreat at Stafford apartment complex, after the owner, Austin-based GVA Real Estate Group, defaulted on a $288 million loan, Bisnow reported. 

The loan, issued by LoanCore Capital in February 2022, has five borrowers, all LLCs connected to apartment complexes owned by GVA. In addition to the Stafford apartments, the mortgage is tied to two properties in the Dallas-Fort Worth area, along with two more in Tennessee and South Carolina. 

Meanwhile, in Chicago, an affiliate of Tom Scott’s  CA Ventures has fallen behind on payments for debt tied to a recently built Arlington Heights apartment complex.

The owner of the 263-unit rental asset at 3401 West Payton Place in the northwest suburb of Chicago is between 30 and 59 days delinquent on the $75 million loan the property secured in 2021, according to credit ratings agency DBRS Morningstar.

The loan was originated by an affiliate of San Francisco-based publicly traded TPG Real Estate Finance Trust with an adjustable interest rate, meaning its debt service payments have likely risen in step with this year’s rate increases by the U.S. Federal Reserve. It isn’t scheduled to mature until late 2024.

CA Ventures claims to own assets totaling $10 billion in value worldwide. The loan delinquency came to light with the firm on the defense in multiple thorny lawsuits in jurisdictions across the nation. 

CA Ventures is among an array of multifamily players to encounter upset investors and legal risks stemming in part from difficulty refinancing loans at higher rates. 

More on distressed properties and businesses:

Isaac Hager bought a distressed Crown Heights office building

Even with $120M in state grants, Shangri-La Industries in LA can’t repay loans

Prado Group takes over 20 multifamily properties in San Francisco from Veritas

Multifamily goes from darling to distress in Texas