Las Vegas Sun

March 28, 2024

Bank of America sues World Market Center over loans

worldmarket

Steve Marcus

The World Market Center in downtown Las Vegas.

Updated Thursday, March 17, 2011 | 5:53 p.m.

Map of World Market Center

World Market Center

495 S Grand Central Pkwy, Las Vegas

Lenders claiming to be owed $46.6 million sued the World Market Center in downtown Las Vegas on Wednesday and are threatening to foreclose on at least parts of the massive furniture industry showroom complex.

Two lawsuits were filed in Clark County District Court in Las Vegas by Bank of America, trustee for investors in the property's mortgages.

Bank of America claims two phases of the property have been in default on their loans since May 2010 and that after a forbearance was granted, the World Market Center failed to make timely loan payments as required after Oct. 1.

In both lawsuits, the bank asks the court to appoint a receiver to run the property's phases backing the loans and to collect rents. The suits say the receiver could run the properties until they're sold or foreclosed on.

World Market Center attorneys have not yet responded in court to the lawsuits, but the company said in a statement Thursday: "Our goal remains consistent; to preserve and enhance the long-term viability of World Market Center and position it for the future. We will continue to work closely with ownership and our lenders to advance that objective."

The center's monthly debt service obligation under one loan is $1.422 million and is $1.825 million for the second loan, the lawsuits say.

"Lender is entitled to seek the appointment of a receiver for, or to obtain possession of, any real or personal property collateral for the debt and to enforce its security interest in, or the assignment of, rents," the lawsuits charge.

"Unless a receiver is appointed, plaintiff will continue to be harmed due to borrower's default under the loan documents," the suits say.

Financial difficulties at the property have previously been disclosed by debt rating agencies.

In 2009, Fitch Ratings placed several Bear Stearns real-estate backed securities on "rating watch negative" after, Fitch said, a loan for the World Market Center was placed into special servicing along with five unrelated smaller loans.

Loans are typically placed into special servicing when they are in default or headed toward default.

World Market Center has more than 5 million square feet of furniture industry showroom space across three buildings, developed in three phases on 57 acres.

The World Market Center was developed by New York-based Related Companies and partners Shawn Samson and Jack Kashani.

Bank of America, in its lawsuits Wednesday, said it's the trustee for investors in two series of Bear Stearns commercial mortgage securities pass through-certificates.

They are Series 2005-PWR10, with an original loan amount of $225 million; and Series 2007-PWR15, with an original amount of $345 million.

The defendants are WMCV Phase 1, WMCV Phase 2, World Market Center SPE LLC, World Marketplace SPE LLC and WMC Experiences SPE LLC.

The trade publication Home Furnishings Business this month reported the The Related Cos. was involved in a deal to buy the competing industry showroom building the International Home Furnishings Center in High Point, N.C., and part of the deal involved Basset Furniture signing a new five-year lease for the World Market Center in Las Vegas.

The lawsuits didn't say what the principal balance of the loans is, but said $46.6 million needed to be paid to resolve the alleged defaults.

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