Revetas Capital is taking control of a $4B U.S. real estate portfolio owned by a group of German pension funds and other investors.
Bisnow/Stacey Corso
The Transamerica Pyramid in San Francisco, which was sold for $650M to developer Michael Shvo and a group of German pension funds.
The London-based fund manager has been appointed to reposition Deutsche Finance America’s investments, Green Street News reports. Those include a variety of large projects by Michael Shvo, such as the $650M purchase of the Transamerica Pyramid in San Francisco and the Mandarin Oriental Residences on Manhattan’s Fifth Avenue.
The change comes shortly after friction arose at Bayerische Versorgungskammer, Germany’s largest pension fund, which financially backed the American developer through deals struck by DFA.
The executive at Deutsche Finance who managed the BVK investment, Jason Lucas, is no longer with the fund manager, while Rainer Komenda, BVK’s long-serving head of real estate investment management, recently departed the pension fund.
Now Revetas — which has invested and managed over $6B in deals in 10 countries, all in Europe, since its 2002 founding — is taking over the portfolio. Marty Burger, the founder and CEO of Infinite Global Real Estate Partners and former CEO of Silverstein Properties, has been tapped to lead the repositioning efforts.
“After years of stagnation in the markets following the Covid pandemic, the team of seasoned real estate professionals at Revetas, who are specialists in resolving complex special situations, is ideally positioned to help large institutions work through legacy issues while creating new opportunities,” Burger said in a statement.
The investments go beyond Shvo’s developments and include life sciences, multifamily, student housing, partially completed developments and offices. A spokesperson for Revetas declined to share additional details on the portfolio, citing confidentiality.
“The collaboration aims to capitalize on an evolving US real estate market repricing by pursuing the most suitable path for each asset — including repositionings, selective dispositions, refinancings and capital restructurings — while maintaining continuity for tenants, lenders and partners,” Revetas’ press release states.
A spokesperson for Shvo said the announcement does not impact management of its assets. Shvo recently took BVK to arbitration in Manhattan, claiming the pension fund owes him $85M.
Deutsche Finance Group, the parent group of DFA, did not immediately respond to Bisnow’s request for comment.
A BVK spokesperson told Bisnow Monday it was unaware that Revetas had been appointed manager of the fund. It has maintained that its investment in Shvo’s and other U.S. projects was through an indirect fund, and it had no control over decision-making.
BVK invested a total of €611M, roughly $712M, in Shvo real estate development and renovation projects, Bisnow reported this month. It recently came under fire for its spending, with the Bavarian State Parliament calling its decision-making into question.
In October, as certain projects floundered, the government body sent a letter to the pension fund stating that “high losses are looming, forcing those responsible at BVK to explain themselves.”
Among the projects that BVK invested in through DFA are the Mandarin Oriental Residences Beverly Hills and The Raleigh development in Miami Beach. At the California property, Shvo defaulted on $200M in loans before selling dozens of unsold units to Centurion Capital in February.
At The Raleigh, where Shvo planned to restore the historic hotel and build additional luxury buildings, construction has stalled for years, and Nahla Capital is negotiating to buy the project for $275M, Business Insider reported.
BVK previously told Bisnow that its representatives responded to officials’ questions at a Bavarian State Parliament Budget Committee meeting April 2 and that “the state parliament subsequently considered the matter to have been sufficiently answered.”
However, that was not the end of BVK’s troubles with Shvo, as the developer went to Judicial Arbitration and Mediation Services, an alternative dispute resolution organization, claiming that he is owed more than $85M in various fees.
“Without going into detail about individual investments or partners, we would like to state the following as a matter of principle: We continuously review how we can invest in a security-oriented manner while maximizing value for our members, insured persons, and beneficiaries,” BVK said in its statement to Bisnow earlier this month. “It is therefore not unusual to seek a separation, possibly prematurely, depending on the performance of an investment, the overall market, or the existing interest of third parties.”
Matt Wasielewski contributed to this story.