Shvo’s Beverly Hills condominium project defaulted on a $200 million loan

The notice said it could allow Acore to initiate a foreclosure sale within three months.

The site was acquired in 2019 by a group of investors that included Shvo, Bilgili Group and Deutsche Finance. Munich-based pension system Bayerische Versorgungskammer – one of Europe’s largest pension vehicles – was an investor in the deal, according to an announcement at the time.

Serdar Bilgili, chief executive of Bilgili Group, later had a falling out with Shvo and left the partnership.

Less than 20 percent of the units at the property, which is branded and managed by luxury hotel chain Mandarin Oriental, have been sold since sales began more than two years ago, according to a statement from a spokesman for Shvo.

In the statement, Shvo’s spokesman said the property group would seek to sell the property’s remaining 44 unsold apartments in a mass deal with a buyer. It hired real estate services firm Newmark to market the pitch to investors and arrange a transaction.

“The decision allows the partnership to reallocate investment resources to the acquisition of new income-producing assets in anticipation of a lower interest rate environment,” the spokesperson said.

A spokesman for Acore declined to comment.

A representative of BVK, as the Bayerische Versorgungskammer is known, declined to comment on the default or the sale plan, citing confidentiality reasons. The representative said in an email that “our investment in this property in question was indirect and in accordance with the German regulations applicable to us for investments in foreign projects.”

BVK, the email said, “only holds shares in a fund that is itself invested in the relevant real estate indirectly and only together with other investors.”

The default is the latest in a series of setbacks for Shvo and its German investors, including BVK, after a spending spree that began in 2018.

Shvo has acquired $3 billion in prominent real estate assets, including the Transamerica Pyramid building in San Francisco and 711 Fifth Ave. from Manhattan. BVK, a collection of pension funds managing €111.9 billion, served as financial backer in these transactions.

But vacant office space in its portfolio has since opened up, while sales have been slow for its luxury apartments.

A person familiar with the effort to sell the Beverly Hills apartments said Shvo and his partners were seeking a little more than $2,000 per square foot for the apartments, a discount of nearly 30 percent below what the units were recently listed for individually. The person was granted anonymity because he was not authorized to discuss the sales effort.

The offer would likely attract investors who see the opportunity to buy at a discount, then look to sell the units one by one to conventional home buyers at a profit.

A legal complaint filed by Biligili against Shvo in 2020 indicated that BVK initially had the most at stake financially in the project. A chart filed as part of the charges showed what it said were initial investments in the 9200 Wilshire Blvd. project. The chart claimed that BVK contributed about $73 million, representing about 80% of the equity.

BVK in its email said the number was incorrect, but declined to say what its share of the property was. “We cannot comment on detailed information about our investments – also for reasons of confidentiality with our co-investors, business partners and service providers,” the email said.

Beverly Hills apartments aren’t Shvo’s only headache. Two parties recently sued him: a buyer of a $6 million condo in a Mandarin Oriental-branded apartment building at 685 Fifth Ave. of New York and Core Club, a luxury wellness and event space that operates a location at 711 Fifth. Ave.

Shvo tried to dismiss the lawsuit 685 Fifth Ave. and called the Core Club lawsuit “a desperate attempt to avoid its clear contractual obligations”

BVK, meanwhile, has been named as a defendant in some of the litigation that has arisen over the two properties.

In an earlier statement about the lawsuit filed by Core Club, a BVK spokesperson said it “remains convinced that there is no legal basis for the BVK name” in the file.

BVK also stated that it “has no legal or contractual relationship with Shvo”. In earlier statements, a spokeswoman explained that BVK’s investments with Shvo were managed through intermediaries, including Deutsche Finance and another German financial firm, Universal Investment.