What's going on at CA Ventures?
TRD article - https://therealdeal.com/chicago/2023/09/25/ca-ven…
Been hearing rumblings about them being jokers and things not looking great over there for a while, but to summarize:
- Being evicted from their HQ for not paying rent
- Had several small investors who had loaned money to the investment management entity suing because CA was in default
- Not paying for their share of their box at the United Center
- Several under construction projects look to be distressed
- All of the deals that I've seen them buy or develop over the last several years (from the debt side) have always been high leverage/aggressively underwritten/not made a ton of sense economically
Obviously they've made a name for themselves last cycle and allegedly have 15b in $$$ (with institutional backing), but something seems off over there.
Another upcoming casualty of the high rate environment? Curious if anyone has more direct knowledge.
They secured that huge deal with Davidson Kempner / Monarch alternative capital in 2021 fort their healthcare REIT. Made me think they’re doing really well. Obviously not the case. Seems like a nightmare.
LOL - until you get inside look at promote split and fee structure, you never know how a company is doing!
On some large deals, you might only get zero asset management fee or you catch a falling knife where MF is trading at 25-40 percent from 2021 highs.
Also, they acquired in 2021!! At peak market pricing. If they got cute and used a floater, that might be a problem for them today.
Until you understand the voodoo math, best to assume everyone is MAKING UP SH*T
Another update - never good when you have to sell the jet!
https://therealdeal.com/chicago/2023/10/31/ca-ventures-ceo-tom-scott-se…
From the The Real Deal https://therealdeal.com/chicago/2023/10/23/quadreal-accuses-ca-ventures… QuadReal alleges that Scott in 2019, as CEO of CA Ventures, forced entities tied to the company into leases and subleases at the building for above-market rates, and later helped the office landlord sue to evict his own firm. The 10-year lease terms would have had CA Ventures entities pay a total of about $3 million a year in rent, the suit said. The student housing vehicle into which QuadReal invested was only expected to take one of the five floors in the building that Scott leased for CA Ventures affiliates. Scott nevertheless executed a guaranty that put the student housing vehicle on the hook for the entire lease in the event of a default by one of the other tenants, which were all entities tied to Scott’s company, the suit alleges. “Scott, as CEO of the various CA entities, breached his fiduciary duties to CA Student Living … by approving the above-market and unreasonable lease and sweetheart guaranty in transactions he stood to benefit from through the excess revenue that would flow to landlord,” the suit said.
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