Laguna Beach-based investment firm purchases $195M loan for local real estate portfolio
By SARA HALL
A Laguna Beach-based investment firm has purchased the $195 million loan for an 18-property portfolio of local real estate developer Mo Honarkar.
As first reported on GlobeSt.com, Dornin Investment Group (DIG) acquired the “non-performing loan” that includes apartment, retail, office, and hospitality assets across Southern California.
DIG’s CEO and founder Chris Dornin declined to comment.
Honarkar previously had financing for a portion of his real estate portfolio with a company called LoanCore out of New York, Honarkar said during a phone interview with Stu News Laguna on Wednesday (May 19). He received notice on Wednesday that the loan note was sold, Honarkar said.
Hotel Laguna is not part of this portfolio, Honarkar confirmed.
He is also in the process of refinancing with a different local financial institution. The refinance is well underway and should be completed within two to three weeks, Honarkar said.
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Photo by Mary Hurlbut
Mo Honarkar
During a marriage dispute with his now ex-wife, the court assigned a receiver to his companies, Honarkar explained.
“Portfolio financing was due for renewal in December 2020 and the receiver failed to renew,” Honarkar said. “Therefore, it went on default due to missing the renewal date by the receiver.”
His divorce was finalized in mid-December and the receiver was removed; however, the damage was done, Honarkar said.
A lawsuit filed in January on behalf of Delaware-based LCC Warehouse 1 LLC asked the court to foreclose on the properties used as collateral for the loan. Most of the properties are in Laguna Beach.
LCC Warehouse was the successor-in-interest to LoanCore Capital Credit REIT, which funded the loan on November 16, 2018. On Tuesday (May 18), the court ordered LCC Warehouse be dismissed with prejudice on the complaint, according to Orange County Superior Court records. The case now lists DIG PFSS LBCP Holding Company, LLC as the plaintiff.
The foreclosure notice still stands even with the purchase of the loan.
According to the lawsuit, the loan consolidated two previous loans, reset pricing and maturity dates to December 9, 2020, and provided additional proceeds to acquire one new property and refinance five properties already owned by Honarkar.
The lawsuit claims the borrowers now owe the principal, unpaid accrued interest, accruing interest, late charges, attorneys’ fees and costs, and other fees and charges in accordance with loan documents.
In January, Honarkar attorney Isaac R. Zfaty told Stu News Laguna in an email that the loan has been renewed several times over the years, and Honarkar’s entities have complied with all of the requirements under the loan agreement.