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Deutsche Finance America sues Germany’s BVK over CRE losses
The lawsuit alleges mismanagement of a nearly $1.9 billion U.S. trophy CRE portfolio tied to projects including the Transamerica Pyramid and seeks damages over more than $1 billion in losses.
Deutsche Finance America has filed a lawsuit in Delaware Superior Court accusing Bayerische Versorgungskammer, Germany’s largest pension fund, of mismanaging a nearly $2 billion U.S. commercial real estate portfolio and trying to shift blame for losses onto the investment manager, according to Bisnow.
The complaint, filed Monday, seeks compensatory damages from BVK that would be determined through a jury trial, and it cites allegations including breach of contract, defamation, and deceptive trade practices. BVK invested nearly $1.9 billion across seven U.S. projects via a partnership that included Deutsche Finance America and developer Michael Shvo, the report says.
The portfolio included trophy assets such as the Transamerica Pyramid in San Francisco, which sold for $691 million earlier this year, along with the Mandarin Oriental Residences in Beverly Hills and the Coca-Cola building in Manhattan. DFA alleges BVK’s mismanagement included failing to approve operating budgets, refinancing decisions, maintenance and development measures, and proposed leases.
BVK’s spokesperson said the firm has not been served and rejected the allegations as baseless, adding that BVK plans to use all legal means to defend itself. Bisnow reports BVK already recorded a write down of around 163 million euros for fiscal 2024 and expected further losses that could total 853 million euros, or more than $1 billion.
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