It’s been a rough year for Shaya Prager.
Once known for his aggressive office property acquisitions, the New Jersey-based investor is now facing multiple lawsuits and foreclosures after his ambitious investments, which targeted struggling office markets, appear to be unraveling.
Prager first gained attention during the pandemic when he began snapping up office buildings that most investors were avoiding. His firm, Opal Holdings, acquired over $2 billion in real estate, including office campuses in New Jersey and office towers across major U.S. cities like Chicago, Minneapolis and Fort Worth.
Despite widespread uncertainty around the future of office space, Prager’s contrarian approach won praise from brokers who saw his willingness to bet on a struggling asset class as a bold move.
But his controversial ground lease structure, a method where he separates land ownership from building ownership and finances both, has become a focal point in several lawsuits.
While legal, experts call the common ownership structure highly frowned upon due to its potential to misalign interests between borrowers and lenders.
One of the most high-profile examples is in Fort Worth, where Prager used the maneuver to take out $169 million in loans on the tallest building in the city in Burnett Plaza, which it purchased for $137.5 million. But now with unpaid bills piling up and multiple liens filed, the property has gone into foreclosure and the lender, Pinnacle Bank, has accused Prager of fraud.
Prager’s risky strategy is backfiring in other markets, too.
In Chicago, Prager is facing accusations from a Cushman & Wakefield receiver that Opal is improperly withholding cash needed to manage a suburban office property amid its lender’s $106 million foreclosure lawsuit. Opal also has been hit with a foreclosure suit on a massive Minneapolis-area office campus.
Closer to home, investors related to three other properties in Iselin, New Jersey, Richmond, Virginia, and Fort Washington, Pennsylvania, sued Prager in June, claiming he owes them $10 million.
Prager’s attempts to liquidate assets, like listing his South Florida beachfront estate for $68 million, suggest he’s trying to free up capital as creditors circle. However, with lawsuits continuing to pile up, and his reputation taking a serious hit, it’s unclear if these efforts will be enough to keep his once-thriving real estate portfolio afloat.
Prager’s unraveling office empire underscores the dangers of speculative investing in a market undergoing a significant transformation. His financial strategies, once seen as innovative, now appear to be part of a pattern that’s drawn the attention of federal investigators.
The reality is that the ripple effects of these deals will likely be felt far beyond Prager himself, impacting office markets across the country that were already on shaky ground.