* Tishman Speyer, Walton Street bought site in 2007
* Lawsuit claims owners owe $154 mln, seeks foreclosure
* Site once center of Howard Hughes aircraft business
LOS ANGELES, Oct 23 (Reuters) - A Cleveland-based bank sued to foreclose against the limited partnership that controls a Tishman Speyer Properties LP complex in California, claiming the owners failed to pay more than $150 million in debt.
KeyBank National Association on Oct. 20 filed the lawsuit on the 64-acre Campus at Playa Vista -- an office complex a mile from the beach where aviator and filmmaker Howard Hughes once worked -- in Los Angeles court, seeking a receiver for the debt and foreclosure.
Real estate private equity firm Tishman Speyer had teamed up with Walton Street Capital LLC to buy the project in 2007 while the real estate market boomed.
Commercial real estate is widely considered one of the biggest risks to the financial system. Though the worst of the global commercial property meltdown is over, the U.S. market continues to struggle, Jonas Lang LaSalle Inc JLL.N said in a report this week. [ID:nLL264133]
The lawsuit in Los Angeles follows Tishman Speyer’s troubles in New York.
This week, a huge Manhattan apartment complex that is a joint venture of Tishman Speyer and asset manager BlackRock Inc BLK.N, lost a court battle that could drive its landlords into foreclosure. [ID:N2238793]
A spokesman for Tishman Meyer said that debt on the Los Angeles site is secured exclusively by the property, and that its status does not impact the company’s other buildings or properties.
Tishman Speyer had planned to develop the Campus at Playa Vista with offices, restaurants and retail space and started construction in July 2008.
As of Oct. 16, the owners of the property owed $156 million on the original loan of $147 million, which KeyBank and the Royal Bank of Scotland RBS.L PLC made in February 2007, according to the lawsuit.
Hughes placed the headquarters of his aviation business on the site now occupied by the Los Angeles complex, which includes 11 historic structures built in 1941.
In 1994, the property was vacated and leased for film production sets and sound stages, according to the lawsuit. Raleigh Studios manages the buildings and makes more than $100,000 a month from leases to film studios and production companies, the lawsuit said.
Reporting by Laura Isensee; Editing by Richard Chang
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