Important Update Regarding CMB Group 48, The Century Plaza ProjectOctober 12, 2022
10/14/2022 - It has come to our attention that at least one of our competitors are attempting to use this post as a marketing ploy to promulgate negative media attention to create a competitive advantage. We thank them for sending you to our website and welcome you to find out exactly who we are:
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No one is immune to the global issues that have plagued the world and that we discuss below. We, unlike others, face problems head on, fight, and are transparent with our investors and the industry at large. These are values you should look for when making an EB-5 investment. Things will not always go to plan. Its when things get difficult that you really know who you are in business with. We don’t run away, we face it head on.
Dear Investors and Friends of CMB:
At the outset, thank you ALL for your tremendous support and patronage over the years and especially now. As you know, our industry, economy, country and world has faced unprecedented headwinds the past couple years in particular. The COVID-19 pandemic, political discord, wars, unprecedented supply chain problems and inflation have adversely impacted many projects worldwide. One such project is the Century Plaza redevelopment project located in Los Angeles, California (“the Project”). Unfortunately the Project due in part to its size and the iconic nature of the hotel and project, has received significant media attention the past several weeks.
COVID, supply chain issues as well as price escalation significantly impacted project completion deadlines and construction costs. The Project is allegedly insolvent and in default on its secured obligations, because it was unable to meet its July 9, 2021, maturity date under the various loan agreements with senior and mezzanine lenders.
In particular, according to the senior lender’s Notice of Default, which was publicly recorded in the Los Angeles County Recorder’s office, a non-judicial foreclosure sale will occur on or after November 28, 2022 unless CMB Export Infrastructure Investment Group 48, LP (“Group 48”) and/or other lenders take action during the “cure period” before then to repay the total claimed Project indebtedness. Further, the senior mezzanine lender served notice of its non-judicial foreclosure sale that will occur on December 14, 2022 in New York unless Group 48 and/or other lenders take action during the “cure period” before then to repay the total claimed Project indebtedness.
It is CMB’s belief that there is plenty of value in this Project. The Project has an outstanding location, superior completed construction, and initial sales of the condominiums are meeting projected square foot rates. The current and future performance of this magnificent hotel, given time, should only increase in value.
However, one of our investor groups, Group 48, as Junior Mezzanine Lender for the Project, for its part, is still owed in excess of $500,000,000 in principal and interest on the Project by the borrower, CPMB LLC. Despite the value in this Project, this junior mezzanine position is in grave danger if the Senior Lender’s foreclosure is consummated. As such, Group 48 has retained counsel to investigate and respond to the Notice of Default as well as take affirmative steps to protect and preserve Group 48’s interests as Junior Mezzanine Lender.
This is a tough situation, but rest assured we at CMB are doing everything possible to mitigate this unfortunate event. Again, thank you for your support and I will keep you all updated as events transpire.
Sincerely,
Patrick Hogan
Manager of the General Partner