Former Silverstein CEO, UK firm to manage Shvo investor’s US portfolio

Former Silverstein Properties CEO Marty Burger and a European investment firm Revetas will oversee the management of a $4 billion real estate portfolio with stakes in Michael Shvo’s firm’s trophy properties.

Revetas was mandated to take over the management of Deutsche Finance America, according to sources familiar with the matter. 

Deutsche Finance America (DFA) acted as the U.S. arm of Munich-based investment manager Deutsche Finance Group. DFA invested in many of Shvo’s most prominent assets, such as the Coca-Cola building in Manhattan, the Raleigh Hotel in Miami Beach and the Transamerica tower in San Francisco. The company also partnered in deals unrelated to Shvo, including a 1 million-square-foot life sciences development outside of Boston. 

Revetas tapped Burger, who now runs his own firm, Infinite Global Real Estate Partners, as its U.S. point person. Green Street was the first to report the news.

In its press release, Revetas describes its intention as supporting the repositioning of the German firm’s U.S. portfolio. This will include “repricing by pursuing the most suitable path for each asset – including repositionings, selective dispositions, refinancings and capital restructurings – while maintaining continuity for tenants, lenders and partners.”

Revetas and Burger will replace the job of Jason Lucas, Deutsche Finance America’s founding partner and former CEO. 

Lucas recently left the company, and there is now an ongoing dispute between him and Munich-based DFG. Lucas, who retains a minority stake in DFA, has hired counsel to pursue legal action, according to sources familiar with the situation.

Lucas declined to comment.

A spokesperson for Shvo said there would be no impact on management of its assets.

Burger and Revetas’ role at DFA will come down to the rights provided in DFA’s operating agreement with Shvo. This agreement will dictate whether DFA has the ability to force Shvo to sell or restructure properties. It’s possible DFA does not have many rights, as limited partners often do not, making the new hires’ jobs essentially toothless. 

“Revetas has been mandated as an independent fiduciary to maximize value for all investors in the portfolio. The portfolio contains outstanding, high-quality real estate,” said Eric Assimakopoulos, founding partner of Revetas Group. “By combining the investors’ deep platform knowledge with Revetas’ deep value and operational toolkit, we are confident we can optimize value for existing stakeholders through the most appropriate solution for each property.”

To be sure, the German investors’ foray into U.S. real estate has not gone as planned. DFA was founded in 2018 to manage deals on behalf of investors in Munich-based DFG. 

That year, a host of German investors, including the pension fund BVK, put money into Shvo’s luxury real estate projects. But Covid-19 and higher interest rates hit nearly all U.S. office assets — and Shvo’s properties were no exception. 

Shvo’s signature project in Miami, The Raleigh, for example, has stalled. New York-based Nahla Capital won a bid to purchase the property for about $275 million. Shvo has the right of first refusal and is trying to match the offer, Business Insider reported last month. Shvo and his partners paid a combined $243 million for the property in 2019.

Shvo is separately in the midst of a dispute with BVK. Shvo has filed a claim through the private Judicial Arbitration and Mediation Services, alleging the firm is owed more than $85 million in fees, including $27 million in payments tied to specific properties and $21 million in carried interest from the Transamerica Pyramid project in San Francisco, Bisnow reported.

BVK said in a statement it is “not unusual to seek a separation, possibly prematurely, depending on the performance of an investment, the overall market or the existing interest of third parties.”