An investment firm that was partnering on two of Michael Shvo’s biggest recent office tower acquisitions in San Francisco and Chicago is accusing the developer of canceling their agreements and cutting it out of those deals.
BLG Capital filed its suit against Shvo and his investors for allegedly cutting it out of the $600 million Transamerica Pyramid purchase in San Francisco, and the $370 million acquisition of the “Big Red” office tower in Chicago.
Serdar Bilgili, chairman of Turkey-based BLG, alleges that Shvo’s eponymous company “acted in bad faith” and “usurped business opportunities” with deals for those properties, according to Bisnow.
Shvo and his partners purchased the Chicago tower at 333 South Wabash Avenue in January from John Buck Company and Morgan Stanley, and signed a purchase agreement for the Transamerica Pyramid earlier this month from Transamerica Corp. That deal included a 10 percent coronavirus discount on what had been a $700 million purchase price.
BLG’s suit alleges it partnered with Shvo’s firm to buy the two properties, but was later told the deals were cancelled, Bisnow reported. Shvo and Deutsche Finance America then signed contracts to buy the properties without BLG, according to the suit. The San Francisco Business Times first reported on the lawsuit. Shvo’s representatives told the outlet it was going forward with the planned deals.
Shvo and his investors have been on an acquisition tear over the last year and a half, buying up around $3.5 billion worth of properties across the country. That includes two big Manhattan deals: the acquisition of the Coca Cola building at 711 Fifth Avenue and the purchase of 530 Broadway.
Shvo told The Real Deal in late March that his firm was one of the “selective groups” with “a lot of cash,” and was looking for opportunities as the pandemic’s impact motivated property owners to sell. [Bisnow] — Dennis Lynch