Here is what the complaint lays out.
Starwood came from the loan on or about March 8, 2023, providing $54.5 million to Fort Lee Workplace LLC. The security consisted of a nine-story mixed-use building at 2 Executive Drive in Fort Lee, New Jersey, and a different eight-story parking lot next door. Starwood then sold the loan to Barclays Commercial Home Loan Securities LLC, which transferred it into the CMBS trust under a Pooling and Servicing Arrangement dated April 1, 2023.
As part of the sale, executed through a Mortgage Purchase Contract on April 27, 2023, Starwood made what the complaint calls a “No Material Damage” representation and warranty, basically ensuring the trust that the collateral was free of product damage.
The trust alleges it was not.
According to the complaint, problems with the parking garage were documented well before the loan changed hands. A September 2021 report from an affiliate of the borrower allegedly warned that the garage surface was “extremely hazardous and prepared to collapse.” More striking still, the grievance declares that the Fort Lee Building Department checked the garage on April 27, 2023– the very day the loan sale closed– and provided a “Notification of Unsafe Structure” the next day, buying the garage abandoned by May 27, 2023. That condition, the problem states, was never ever remedied.