Developer Building 180 Units In Van Nuys Files For Bankruptcy
FMB Development defaulted on a loan tied to an apartment project in Van Nuys last month.
Now, the FMB-linked entity that is listed in public records as the owner of the site at 7111 North Sepulveda Blvd. has filed for Chapter 11 bankruptcy protection in a California court, The Real Deal reported.
The filing earlier this month indicates that the entity seeks to resolve debt tied to the unbuilt, 180-unit project. As of August, FMB had defaulted on three loans from three different lenders totaling $15M, TRD reported, citing default notices recorded with Los Angeles County.
FMB listed those three lenders as creditors in its bankruptcy filing along with hard-money lender RTI Properties, which has a $2.45M claim, according to the bankruptcy filing.
FMB purchased the Van Nuys site with entitlements in 2018, paying $9.5M, Urbanize LA reported at the time. The property was approved for a six-story building with 180 studio, one-, and two-bedroom units and just under 5K SF of street-level retail space.
In October, lenders filed a notice of default on another incomplete FMB apartment project at 1317 South Hope St. in Downtown, TRD reported.
Nationally, tens of billions of dollars worth of multifamily properties are facing potential financial issues, with the sector accounting for almost one-third of all properties at risk of becoming distressed, an MSCI report published last quarter found.