The 274K SF One Financial Plaza office building in Downtown Fort Lauderdale inched closer to the auction block this month.
Trimont, acting as special servicer on a $61.5M collateralized loan obligation tied to the property, filed a foreclosure complaint Aug. 12 against Alliance HP. The vertically integrated real estate firm not only owns One Financial Plaza but also has one of its two U.S. offices at the property at 100 SE Third Ave.
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In the suit, filed in Florida’s 17th Judicial Circuit for Broward County, the lender argued the appointment of a receiver was necessary because Alliance HP has been collecting rent payments but not making required debt service payments.
“The Defendant has continued to collect the revenues and profits from the Property, while the payments due to Plaintiff under the Mortgage have not been paid,” unnamed attorneys from Holland & Knight representing Trimont wrote in the suit.
Judge John Bowman granted the motion Tuesday, appointing Chris Neilson, president of Trigild Florida, to act as receiver for the debt settlement. The lawsuit was identified and distributed by property intelligence platform Vizzda.
Alliance HP, Trimont and Holland & Knight didn’t respond to Bisnow’s requests for comment.
The special servicer alleges in the suit that Alliance HP has defaulted on $61M in fees and costs, including $59M in unpaid principal after the debt matured and an additional $2M in default interest, which the suit says continues to accrue at a 5% rate.
The loan was first moved to special servicing in February after Alliance HP was unable to secure an extension on the debt at maturity because the office tower, despite being 95% leased, was not meeting certain performance benchmarks.
Alliance HP, which also has an office in Pennsylvania, first secured a three-year, $58.5M loan in September 2019, with two one-year extension options if it was able to maintain a maximum 9.5% debt yield, a debt service coverage ratio of at least 1.25 and a maximum loan-to-value ratio of 70%, among other requirements, Cred iQ reported in February.
When the loan was moved to special servicing its debt service coverage ratio was 0.74, with the interest rate on the loan jumping to 9.02% from 3.55% in 2019, Cred iQ CEO Mike Haas told Bisnow at the time.
Alliance HP first reached a forbearance agreement in October 2023 with the lender and a second forbearance period in April that expired at the end of July, according to the suit.
“As consideration for the April 2024 Forbearance Agreement, the Defendant agreed not to oppose this foreclosure action in the event that, among other things, Defendant failed to deliver to Plaintiff a signed purchase agreement for the Property by July 29, 2024,” the suit states.
Trimont, a subsidiary of Minneapolis-based Värde Partners, requested in its civil suit that the property either be transferred to their ownership or sold to satisfy the outstanding debt.
Alliance HP purchased the property for $82M the same year the debt was issued and closed a separate $35M deal for the land underneath the office tower, property records indicate.
One Financial Plaza was listed for sale in May, but Alliance HP was unable to find a buyer, according to special servicer notes.
Instead, the owner had shifted to trying to package the debt as a CMBS loan valued between $50M and $52M, which would have left Alliance HP with around a $10M gap to cover the balance of the existing loan.
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