As the Las Vegas-area commercial real estate market continues to struggle, lenders and distressed-debt investors are proceeding full speed ahead with new lawsuits as they try to foreclose on properties, collect past-due balances or enforce personal guarantees.
Among the latest lawsuits are these covering office, hotel, retail and restaurant projects:
• An entity called GCCFFC 2003-C2 OFFICES AT 2550 & 2595 sued Park 2000 II LLC, alleging defaults under a $19 million agreement covering the Park 2000 Business Park. That suit seeks appointment of a receiver to supervise the property while the lender pursues foreclosure.
The property at issue is at the northeast corner of the intersection of Sunset Road and Eastern Avenue and includes property on Sunset Road, Chandler Avenue, Harrison Drive and McLeod Drive, the lawsuit says.
• General Electric Capital Business Asset Funding Corporation of Connecticut sued Seven Hills Hotel LLC, owner of a Wingate Inn that occupies part of the company’s 2.28-acre parcel at 3041 St. Rose Parkway in Henderson. The suit seeks appointment of a receiver to run the property while General Electric tries to foreclose on it. It alleges defaults on an $8 million loan agreement.
• Branch Banking and Trust Co., successor to the failed Colonial Bank, sued developer David M. Frank, the Merrill Companies LLC and others alleging defaults under a $19.8 million loan to develop a retail center near the Wal-Mart on Lake Mead Drive, just east of the Fiesta hotel-casino in North Las Vegas. That suit seeks enforcement of personal guarantees made by Frank and others.
• Multibank 2009-1 CML-ADC Venture LLC, owner of some of the loans from the failed Silver State Bank, sued Half Shelf Entertainment Group Inc. alleging defaults on a $175,000 loan for the company’s bar and restaurant at 10430 South Eastern Ave. in Henderson. That suit seeks to enforce personal guarantees for the loan.
None of the defendants in these cases – filed beginning Aug. 24 and continuing through last week – have answered the lawsuits.
Frequently, the filing of such lawsuits is one step in a drawn-out negotiating process that may or may not be resolved out of court.
These are just a few of the many commercial loan defaults in Southern Nevada since the start of the recession in 2008 – and more are likely as the market continues to adjust to unemployment running at 14.2 percent and elevated levels of residential foreclosures.
There’s so much excess office space in the Las Vegas area that the office vacancy rate hit an all-time high of 24.8 percent in the second quarter, up from 24.1 percent in the first quarter, Applied Analysis reported.
The retail market is in better shape, with a vacancy rate of 10.1 percent, down nearly 0.4 percentage points from the first quarter, Applied Analysis said.