German Pension Fund Writes Down Shvo-Tied US Property

The hits keep on coming for Michael Shvo.

German pension fund Versorgungswerk der Rechtsanwälte im Lande Hessen wrote down the value of a real estate investment tied to the developer, Bloomberg reported. It wasn’t clear what property was written down.

A representative for Shvo did not immediately respond to a request for comment from The Real Deal.

The pension fund manages retirement assets for local lawyers. It reportedly invested indirectly in a trio of properties managed by Deutsche Finance Group.

“As a precautionary measure, we partially wrote down the value of one of these properties at the end of 2024,” managing director Albert Esser told Bloomberg.

It should be noted that Versorgungswerk der Rechtsanwälte im Lande Hessen, which invested indirectly in Shvo properties, is one of several German investors tied to the investor and not Bayerische Versorgungskammer, the largest public pension group in that country, which has also helped fund multiple Shvo projects.

A write-down from a small German pension fund may not be earth-shattering for Shvo, but it adds to mounting issues facing the developer.

Shvo has been involved in a high-stakes arbitration dispute with Bayerische Versorgungskammer, known as BVK, which backed many of the developers’ high-profile projects stateside.

Shvo alleged he is owed more than $85 million in fees, including $27 million in payments tied to specific properties and $21 million in carried interest from the Transamerica Pyramid project in San Francisco.

Shvo’s projects — often funded by German pensioner money — include the Raleigh Hotel in Miami, Mandarin Oriental Residences in Beverly Hills and 711 Fifth Avenue in New York. BVK invested more than $712 million in Shvo-related deals via a fund managed by Deutsche Finance America, though the pension fund argues it has no direct contractual relationship with Shvo.

In Miami, the redevelopment of the historic Raleigh Hotel has dragged on interminably and the property is now subject to a $275 million bid from Nahla Capital, which Shvo can match to retain control.

In Beverly Hills, meanwhile, Shvo defaulted earlier this summer on $200 million in loans just four months after completing the Mandarin Oriental Residences.

And the developer has also started the process of evicting the exclusive members-only Core Club from 711 Fifth Avenue in Manhattan.

— Holden Walter-Warner