Firm sued over student housing deal in Eugene
EUGENE — A lawsuit filed in Eugene accuses a real estate firm of improperly trying to back out of a deal to buy four recently built apartment complexes near the University of Oregon.
Dan Neal, a prolific local developer of student housing, wants a U.S. District Court judge to either force Harrison Street Real Estate Capital LLC to buy the properties or let Neal keep the nearly $2 million in earnest money the Chicago-based firm put down in May.
“The parties are discussing a potential resolution of the dispute,” Neal wrote in an email to The Register-Guard. He declined to provide more specifics. Harrison Street has yet to file a reply in court and did respond to a request for comment.
The lawsuit does not list the proposed sale price. The four properties have a combined market value of about $35 million, according to the Lane County assessor's database.
The lawsuit comes as developers from around the country are piling into the Eugene market with plans to build student housing, even though enrollment has flattened after years of explosive growth.
Harrison Street is a national player in real estate acquisition and sales. The company's specialties include buying and managing collections of income-generating properties on behalf of pension funds, insurance companies, foundations and wealthy families, according to the firm's website.
The firm says it currently manages $5.5 billion worth of properties, including student housing units with more than 28,000 beds.
The company, however, is trying to sell off some its student housing inventory. Earlier this month, Harrison Street said it was seeking buyers for 2,670 student housing units in 14 states. Some of the projects are completed and others are under construction, the company's website said.
In the Eugene dispute, Neal alleges that on May 8 he entered into an agreement with Harrison Street to sell the company four complexes totaling 185 units. Under the agreement, Harrison was supposed to assume Neal's mortgages on the properties, the lawsuit says. The mortgages total about $15 million, deeds recorded with Lane County indicate.
On Oct. 16, Harrison gave notice that the sale was off and that it wanted its earnest money back from the escrow agent holding it, the suit states. Neal has filed an objection with the escrow agent, freezing the money for now, the lawsuit says.
Neal has more projects other than the four in dispute. His latest completed student housing complex is The Prefontaine, a 20-unit building finished two months ago.
Information from: The Register-Guard, http://www.registerguard.com