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Developer sues JLL for alleged manipulated projections on D.C. apartments
The suit says the Pinnacle deal sold for $30.5M in April 2024 and left the developer seeking $12.4M after claiming losses of more than $7.4M.
A doctor who hired commercial real estate services firm JLL to develop a D.C. apartment project is suing the company, alleging JLL manipulated financial projections that contributed to millions in losses on the deal, according to Bisnow.
The lawsuit, filed in Cook County, Illinois, where JLL is headquartered, centers on the 115-unit Pinnacle apartment building at 7 New York Ave. NE in the NoMa neighborhood. The developer, Rishi Bhatnagar, says he delivered the building in 2024 and sold it in April for $30.5M to July Residential.
Bisnow reports that the developer is seeking $12.4M in damages from JLL, combining claimed losses of more than $7.4M with fees, interest and $4.3M in so-called lost opportunity damages. The complaint alleges breach of contract, fraud, fraudulent inducement, negligent misrepresentation and breach of fiduciary duty.
The suit describes a series of projection updates JLL provided beginning in March 2021, including projected stabilized net operating income and debt-yield targets tied to lender requirements. It says JLL initially projected NOI of $1.65M, later revised it to $1.94M in December 2021 and then to $2.04M in January 2022, according to the complaint, with JLL assumptions allegedly adjusted to raise NOI, such as rents, payroll, vacancy and rent concessions.