Lender sued for botched $ 200 million loan deal with Gold Coast condo developer

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CW Capital Management, a subsidiary of Alexander Shing’s LA-based Cottonwood Group, is suing a Chinese property developer and New York-based brokerage company for abandoning a $ 205 million loan agreement on a luxury New Jersey condominium.

Hongkun USA, headquartered in Beijing, has already begun construction on 1800 Avenue in Port Imperial (pictured above), a 280-unit luxury condominium complex that hugs the Hudson River in Weehawken.

However, CW said it spent time and money setting up senior loan funding that would position Cottonwood as the main investor in the project for $ 3.2 billion before Hongkun stepped behind its back and Tribeca Realty Capital (TRC) in Visited New York to look for another lead investor.

According to CW’s complaint, CW had exclusivity on the loan after Hongkun signed a term sheet last year, but the deal collapsed when it became known that the Tribeca Realty Capital loan was being offered to other lenders.

Hongkun has counterclaimed alleging that CW dragged out the lending process and reclaimed its $ 200,000 deposit.

TRC filed a motion to dismiss, but on Wednesday New York County Supreme Court Judge Barry R. Ostrager dismissed the motion and ordered proceedings to continue. In court files, TRC said it was hired by HongKun to secure funding for the Weehawken project when CW made no progress. The Manhattan company said it had never been advised that CW had already been hired as its exclusive financial advisor.

“HK asked us to secure expedited funding as others were not making any significant progress. We had no prior knowledge of HK’s arrangement with others and we hadn’t even heard of CW Capital Management LLC, ”Tribeca said in court documents.

FRANK DiCARLO

Frank S. DiCarlo, Special Counsel at Kasowitz Benson Torres LLP, representing CW on this matter, said: “We are pleased with Judge Ostrager’s well-reasoned decision and look forward to continuing the investigation and bringing our case to court . “

Hongkun is one of a number of Asian developers who have penetrated the US housing market in recent years. The so-called Gold Coast along the Hudson River has been fertile ground for companies like DMG, China Overseas America, and Landsea Holdings, which are located in the formerly industrial waterfront that stretches nine miles from Bayonne to Fort Lee and of trendy housing developments, restaurants, and shops for a millennial workforce looking for a cheaper alternative to Manhattan.

Port Imperial, where Hongkun is building its new 1800 Avenue, which CW wanted to fund, is one of the largest. The $ 3 billion waterfront mixed-use master plan project spans two and a half miles and includes two Marriott-branded hotels.

Port Imperial is a 200 acre Masterplan planned community. Render via Mack-Cali

Roseland Residential Trust is the lead developer of the 200 acre Port Imperial and is currently developing two of its own luxury residential projects due to open in early 2021 – RiverHouse 9, a 313 unit building in Weehawken, and The Capstone, a 360 unit building in West New York. At the beginning of this year, Roseland acquired 100 percent of the land on five further plots on the waterfront in Port Imperial with development potential for around 900 apartment buildings and 300,000 m² of office space.

Hongkun USA paid nearly $ 75 million to purchase two pieces of land in Port Imperial to build 1800 Avenue at 115 River Street. However, no official plans have been submitted for the location, according to a city spokesman for Edgewater.

1800 Avenue rendering above and above via Handel Architects

Cottonwood is a multi-billion dollar asset manager whose portfolio includes EchelonSeaport, currently the largest residential development in Boston. It’s part of a luxury lifestyle brand that owns the 40-story EchelonNomad apartment on 316 Fifth Avenue in Manhattan. The company has also partnered with Korea’s Hana Alternative Asset Management to pursue other real estate investment and lending opportunities in primary markets such as Boston, New York, Los Angeles, San Francisco, Houston and Seattle.

In a statement sent via email, Tribeca Realty Capital said, “Tribeca has never made any arrangements with CW. We’re curious why a real estate developer (CW has a development project in Boston) is acting as a mortgage broker and suing us and Hong Kong. I believe Hongkun is counterclaiming an upfront payment to CW and they have failed to fulfill their obligations under the agreement. “

Hongkun USA did not respond to an email request for comment.

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