Eagle Bancorp’s Insider Loan Scheme Exposed

“The Best Way to Rob a Bank is to Own One”

-Title of book by William K. Black on the Saving & Loan Crisis

IMPORTANT – Please read this Disclaimer in its entirety before continuing to read our research opinion.  The information set forth in this report does not constitute a recommendation to buy or sell any security. This report represents the opinion of the author as of the date of this report. This report contains certain “forward-looking statements,” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential,” “outlook,” “forecast,” “plan” and other similar terms. All are subject to various factors, any or all of which could cause actual events to differ materially from projected events. This report is based upon information reasonably available to the author and obtained from sources the author believes to be reliable; however, such information and sources cannot be guaranteed as to their accuracy or completeness. The author makes no representation as to the accuracy or completeness of the information set forth in this report and undertakes no duty to update its contents. The author encourages all readers to do their own due diligence.

You should assume that as of the publication date of his reports and research, Aurelius and possibly any companies affiliated with him and their members, partners, employees, consultants, clients and/or investors (the “Aurelius Affiliates”) have a short position in the stock (and/or options, swaps, and other derivatives related to the stock) and bonds of Eagle Bancorp. They therefore stand to realize significant gains in the event that the prices of either equity or debt securities of Eagle Bancorp decline.  Aurelius and the Aurelius Affiliates intend to continue transactions in the securities of Eagle Bancorp for an indefinite period after his first report on a subject company at any time hereafter regardless of initial position and the views stated in Aurelius’ research.  Aurelius will not update any report or information on this website to reflect such positions or changes in such positions.

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We are short Eagle Bancorp (NASDAQ: EGBN) because we have uncovered evidence of an insider loan scheme involving the CEO and certain Board Members that we believe jeopardizes the safety and soundness of the bank while potentially leading to severe regulatory penalties.  In our opinion, insiders treat Eagle as their own private piggy bank.

Eagle Bancorp is a Maryland headquartered regional bank earning outsized yields by primarily making commercial real estate and development loans.  Many investors appear to believe that Eagle offers robust growth with minimal risk, a narrative that underpins the stock’s surge to all-time highs and a $2.3 Billion market capitalization. But our research has uncovered a pattern of conduct that we believe is hauntingly similar to the characteristics that have preceded previous bank failures:

• Large Insider loans that finance the CEO’s companies but haven’t been disclosed.
• Fraud accusations that favorable loans are used to enrich the CEO and certain Board Members.
• Undisclosed financial entanglements between largest borrowers and the CEO
• Indications that loans to companies owned by insiders are distressed.
• Compromised and conflicted Board oversight.
• Large recent Insider stock sales.

Eagle’s Chairman and CEO, Ronald D. Paul, has used Eagle to issue large preferential loans in exchange for being personally awarded cheap equity stakes in Eagle borrowers, according to undisclosed fraud suits filed by the founders of two businesses co-owned by Paul.  Documents show that Paul even extracted a $35 million deferred loan origination fee for himself in a transaction that simultaneously included Eagle modifying the borrower’s loan. An email sent from the private accounts of Paul and Eagle’s General counsel asks for the founder of a different borrower co-owned by Paul to sign retroactive documents that are allegedly used by Paul to cover up his self-dealing from Federal Reserve examiners.

Our research suggests that Eagle’s expansion into riskier Acquisition Development and Construction loans is fueled by Paul’s own business interests rather than those of shareholders. Documents reveal that Eagle has made over $180 million in loans to finance the ventures of Paul’s private real estate company through a series of undisclosed transactions that may violate the law.  Paul’s company also holds undisclosed direct/indirect financial stakes in real estate developments of two of Eagle’s largest borrowers who, in turn, have received hundreds of millions in loans from the bank.

Many of Eagle’s “Independent” Directors have received loans or appear to be otherwise benefiting from transactions with the bank they’re entrusted with overseeing.  The Directors have collectively received over $80 million in loans from Eagle with several Directors also investing alongside Paul in at least one borrower. Loans from Eagle also finance business ventures of two members of the Audit Committee, including the Chairman, who previously consented to a permanent injunction with the SEC to settle insider trading allegations (without admitting or denying wrongdoing).

The fundamental problem is that insider self-dealing is often symptomatic of pervasive rot within the institution’s lending and risk management functions. History demonstrates that bad banks have been able to hide the risks lurking in their portfolios during benign credit cycles, only to have them explode to the surface once the music stops. With shares trading at a premium valuation of 2.4x book value, it is our belief that investors simply have yet to discount the true nature of Eagle’s activities.  We therefore see enormous downside potential in EGBN shares.

Our Research Process

We completed an exhaustive forensic investigation into Eagle’s undisclosed activities.  We analyzed thousands of pages of public documents including court records, corporate entity ownership records, county deed records of real estate transactions, and state UCC filings (which are used to perfect loans).   We also engaged a former senior FDIC attorney (“FDIC attorney consultant”) who has over 40 years of experience focusing on banking regulations.  The FDIC attorney consultant helped us assess Eagle’s compliance with banking regulations as well as the potential implications for Eagle’s regulatory exams.

Background

Executive self-dealing and insider loan fraud have featured prominently in bank failures throughout history.  A federal study into 286 earlier bank failures found insider malfeasance at about half of them.

Examples include Westsound Bank, where the FDIC said insiders “acted in their own self-interest at the expense of the bank”.  Prior to its 2009 collapse, Westsound made millions of dollars of generous loans to finance the Chairman’s real estate enterprise, the banks directors, and construction developments where the bank’s top loan officer held an undisclosed financial stake.

The head of Virginia’s failed Bank of the Commonwealth was sentenced to 23 years in prison in 2013 after having treated the bank “as his own personal fiefdom”.  The fraud included reciprocal relationships whereby insiders would receive favors and benefits from borrowers in exchange for favorable real estate loans from the bank.

Insider self-dealing is closely associated with bank failures because it is often symptomatic of severe deficiencies in the institution’s lending and risk management functions.  When regulators see insider self-dealing “they suspect everything else”, according to a banking expert quoted in an article on Westsound’s collapse.

A federal law, Regulation O, guards against insider malfeasance by prohibiting preferential loans to insiders and severely limiting loans to executive officers.  Insider loans and ties between insiders and borrowers are amongst the most serious aspects of regulatory exams, according to our FDIC attorney consultant. The consultant also explained that since since Reg O violations can trigger penalties of as much as $1.1 million per day, many banks avoid making insider loans of any kind.

Undisclosed Fraud Allegations Point To “Cheap Debt for Equity” Insider Enrichment Scheme

While acting as the Chairman and CEO of Eagle, Ronald D. Paul simultaneously is the President of the Ronald D. Paul Companies (“RDP”), which owns a portfolio of real estate properties and operating businesses. Paul has used Eagle to issue preferential loans in exchange for being awarded cheap equity stakes in Eagle borrowers, according to undisclosed fraud suits filed by the founders of two different businesses co-owned by Paul. These allegations, if proven, are extremely problematic because they appear to put Paul in direct conflict with his fiduciary obligations to Eagle’s investors and depositors.

The first suit was filed in February 2017 by Raymond Rahbar, the founder of a co-working business named MakeOffices, against Ronald Paul and affiliates of MRP Realty (“MRP”), a developer that is one of Eagle’s largest borrowers that also owns a stake in MakeOffices (Case No. 2017 02133 Fairfax County Virginia Circuit Court). Rahbar states that he was initially referred to Eagle by MRP in 2015 for a “cheap debt for equity” deal with Mr. Paul. According to the complaint, MakeOffices then received a $10 million line of credit from Eagle at preferential terms not otherwise available in exchange for Rahbar personally awarding Paul an equity interest in MakeOffices at a favorable valuation.

To conceal his self-dealing from regulators, Rahbar states that Paul began to pressure him to sign retroactive documents that Paul said he needed in order to “demonstrate ‘legitimacy’ to the Federal Reserve during routine audits”. In a February 2016 email (below) sent approximately 7 months after the loan was made, Paul requested that Rahbar sign a “clarification letter” created by Eagle’s General Counsel, Larry Bensignor. The proposed letter, “to be typed on Make Office letterhead”, called for Rahbar to attest that there were “no tying arrangements” between the terms of the loan from Eagle and Paul’s investment in MakeOffices. Paul and Bensignor also needed Rahbar to attest that he did “not believe we received and we would not accept terms from EagleBank more favorable than market” and “we consider the relationship we are developing with you [Paul] and the relationship we have with EagleBank to be independent”.

According to the former senior FDIC attorney we engaged as a consultant, the allegation that Paul is deceiving regulators about loans to companies he owns is extremely serious and could explain how this activity has persisted. The mere existence of this letter should cause bank examiners to ask “What is going on here? This is a problem because it is so unusual”.

Separate undisclosed fraud allegations surfaced in a complaint filed in August 2017 by Ted and Mark Neal, the co-founders of a restaurant company named Matchbox Food Group against Eagle Bancorp, Ronald Paul, and Directors of Eagle (Case No. 430230-V Montgomery County Maryland Circuit Court).  The complaint states that Eagle loaned $25 million to Matchbox, where Mr. Paul’s brother is a senior manager. Then in March 2016, a group of investors led by Paul made a $10 million investment in Matchbox in exchange for interest payments and a 6% non-dilutable equity interest.

After Matchbox’s cash flow began to deteriorate, the complaint states that Paul gained control of the company through an additional $10 million investment made through an entity he controls named Egg Cream, LLC in August 2016.  Paul used his position at Eagle to accomplish the transaction by threatening to “padlock the doors” unless the owners “take this money and sign all of the documents”, according to the Neals.

In exchange for the additional investment, the transaction documents (here) show that Egg Cream extracted a $35 million deferred loan origination fee from Matchbox in a deal that included Eagle simultaneously modifying its loan.  This transaction strikes us a very clear example of self-dealing, especially since Eagle’s General Counsel is also an investor personally in Matchbox and was appointed to its Board of Managers with Paul. It also puts Paul and Bensignor on the opposite side of the table from Eagle (as Matchbox representatives) when they should be exclusively focused on the interests of Eagle investors.

Source: Selected captures from various exhibits To Matchbox court proceedings

There are indications that Eagle’s loans to Matchbox and MakeOffices are distressed, which is problematic because the FDIC attorney consultant explained that bad insider loans tend to “wake up” bank examiners.  Furthermore, banks are required to provide more detailed disclosures in SEC filings of all related party loans that are “restructured or potential problems”, but the existence of these loans wasn’t even disclosed to investors in the first place.

Paul and his co-defendants have denied the allegations and separate complaints are filed against both Rahbar and the Neal brothers alleging that they misappropriated assets from the companies (Rahbar: Case No. 2017 00817 Fairfax County Virginia, Smith v. Neal: Case No 430230 Montgomery County.) But even if this is true, it only worsens the fact pattern for Eagle because it means the loans were subject to fraud on top of the apparent financial deterioration of the businesses.

After Rahbar was ousted as CEO, a July 2017 letter sent by MakeOffices to its former general counsel, Jaimie Shapiro, states that MakeOffices “likely faces bankruptcy” and is “millions of dollars in arrears and under the threat of eviction at most or all of its operating locations”.  Other documents filed in court state that MakeOffices became “in technical default of its loan obligations with Eagle Bank” as early as 2016.

Source: Exhibit to Case 1:17-cv-01759-EGS  in U.S. District Court District of Columbia related to a wrongful termination suit brought by Ms. Shapiro. Her departure from MakeOffices triggered both parties to accuse each other of wrongdoing (with Shapiro being named a co-defendant in the suit against Rahbar).

The default of an Eagle loan to a company owned by Paul would likely undermine the credibility of his claims regarding the bank’s credit discipline. Therefore, Paul’s restructuring efforts may have also been intended to keep the existence of the loans from being exposed to investors. The Neal’s complaint even states that a Matchbox partner had hired Paul’s brother as a cheap “insurance policy” and that Ron Paul would not trigger the “default any of our loans because of his reputation as Chairman of Eagle Bank”.  This assertion makes sense because Matchbox’s default likely would have forced Paul to report it to investors, raising tough questions about his involvement.

More broadly, we find this pattern of behavior as being strongly suggestive of pervasive undisclosed insider activity. Since these dealings surfaced only because Paul’s feuds with the founders bubbled over into nasty litigation, how many similar situations must be buried inside Eagle’s balance sheet?

Undisclosed Loans That Finance CEO’s Real Estate Ventures Elevate Eagle’s Risk Profile and May Violate the Law

Our research suggests that Eagle’s expansion into riskier Acquisition Construction and Development (“ADC”) loans is fueled, at least in part, by Paul’s outside business interests rather than those of shareholders. Documents show that Eagle has made over $180 million in undisclosed loans to finance RDP’s real estate ventures.  RDP also has direct/indirect financial stakes in real estate developments of two of the bank’s largest borrowers, Akridge and MRP, which have collectively received hundreds of millions in loans from Eagle.

Not only do these activities dramatically heighten Eagle’s overall risk profile, but they could potentially trigger severe regulatory penalties. According to our FDIC attorney consultant, the existence of loans of this nature would be “wildly in excess” of what’s permitted under Reg O. Regulators typically view violations as a direct threat to a bank’s safety and soundness because “time and time again its violations of these regulations that lead to a bank’s downfall”.

According to public documents we obtained, Eagle has made loans financing at least 10 different RDP properties with amounts totaling over $180 million or over 21% of the company’s Tier 1 capital of $827 million.   We know RDP owns these properties because its website specifically names them as such along with profiles detailing planned developments.  Some of these deals appear to be controlled entirely by RDP, while others are described as joint ventures between RDP and other parties. Deed records and UCC filings confirm the existence of loans from Eagle secured by the properties with documents that, in some cases, even bear the signature of RDP’s COO.  We have included a detailed explanation of the forensic trail of documents used to identify each of these loans in exhibit A.

Note: The loan amounts reflect totals found in deed records as of a point in time and so the balances currently outstanding could differ significantly.

Our FDIC attorney consultant confirmed that Reg O specifically prohibits loans to executive officers and their related interests (companies they control) in excess of $100 thousand except in the narrow circumstances of financing a home or children’s education (see § 215.5 (c)). During a recent call with another investor, an Eagle representative stated that no executive can borrow from the bank except in these circumstances.  Eagle representatives also repeatedly denied that Eagle makes any loans to RDP:

“on any of the properties that Ron owns individually that is through his company, he does not borrow from the bank to finance those projects…he never has. He just feels that would be a conflict and he’s never done that”

But this is clearly false.

Eagle even appears have financed Paul’s speculation in land. Deed records (here) show that Eagle made a $7.5 million loan in 2015 (later up-sized to $9.3 million) to finance RDP’s purchase of a vacant Washington DC parcel near the baseball stadium.  An October 2016 image of the site shows a sign bearing RDP’s logo promising a future development that RDP’s website describes as being a potential mixed-use concept. Shortly after the purchase, Mr. Paul told the Washington Business Journal that he was contemplating future development at the site but “we’re going to hold it for a while, we have no immediate plans. We believe the market is strong as ever”.

In our opinion, this transaction alone may violate Reg O because RDP is clearly a related interest of Paul’s and therefore included in the law’s prohibitions.  Many transactions we reviewed are similarly structured so that the Eagle makes loans to LLCs owned by the Potomac Investment Trust, an entity created by Paul for the benefit of his family. But according to our FDIC attorney consultant, structuring the transactions through the trust does not open any loopholes in Reg O for Paul. Especially since the Trustee is Kathleen McCallum, RDP’s Chief Operating Officer, and the properties held by the trust appear to be controlled by Paul as an extension of RDP (as seen in this example).

The other key consideration is if Eagle’s loans to RDP contain preferential terms, the existence of which would violate Reg O.  We find it unusual that the majority of the properties RDP lists as being “under development” are financed by loans from Eagle while the majority of RDP’s stabilized properties are financed by loans from other banks. This suggests that RDP might be using Eagle to finance riskier ventures at terms it could not get elsewhere. Otherwise why wouldn’t RDP have also used loans from these other banks to finance its development deals?

RDP also holds financial stakes in the real estate developments of at least two of the bank’s largest borrowers, Akridge and MRP. This creates serious conflicts of interest for Paul because Eagle has made hundreds of million in loans to these developers and, in at least four cases, RDP holds a financial stake in the deals.  Documents, for example, show Eagle made large loans to finance two “trophy” office developments that RDP’s website specifically describes as being joint ventures with Akridge (1701 Rhode Island and 1760 Reston). RDP has also partnered with Akridge for a third office tower development, One Tysons East.  Eagle, in turn, has made loans for other Akridge developments such as an office tower at 1101 Sixteenth Street which just broke ground in September.

RDP also has numerous joint ventures with MRP, described in a media account as “cowboys” having a “very disciplined, wild west philosophy”.  RDP’s website lists ten different “Venture Capital Investments” in properties that are simultaneously featured as “portfolio” properties on MRP’s website.

 

Our review of Delaware UCC filings indicates that Eagle has financed at least 8 MRP real estate deals, including ambitious development projects near DC’s waterfront where a media report states that Paul has also partnered with MRP.  At least two loans from Eagle finance MRP/RDP ventures, an industrial building named Collington Park and a planned development at 600 Rhode Island in Washington DC.

Loans to RDP, Akridge, and MRP comprise a sizeable portion of Eagle’s ADC portfolio, which its SEC filings recognize as being inherently risky because it includes loans tied to speculative real estate developments that often generate no cash flow until stabilization. Since these loans are highly sensitive to cyclical downturns even with normal underwriting standards, the Federal Reserve has published risk guidance that establishes threshold amounts for this category. Eagle’s ADC loans have grown materially in excess of this guidance to $1.44 Billion or 23% of the bank’s total loans (more than 30% above the amount implied by the threshold).

Disclosures state that 79% of Eagle’s ADC portfolio is serviced by loan funded interest reserves, meaning that the borrowers pay interest with funds from the initial loan disbursement as opposed to cash generated by the property.  The bank’s SEC filings recognize that “one of the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower’s ability to repay the loan”.  This risk strikes us as being particularly acute because RDP has a financial stake in so many of the borrowers. After all, if Paul is unwilling to trigger the default of loans to Matchbox, why would he trigger the default of large loans tied to developments he is involved in?

Activities of “Independent” Director’s Undermines Board Oversight

Eagle’s Board of Directors, by definition, should be watchdogs who are responsible for preventing and deterring loan fraud.  But our research shows that certain purportedly independent Directors have received large loans from the bank while also investing alongside Paul in at least one Eagle borrower.

These activities create serious conflicts of interest because the Directors have received loans or otherwise appear to be benefiting from transactions with the bank they’re entrusted with overseeing. Unlike loans to executive officers, Reg O does not have the same prohibitions on loans to Directors so long as the terms are not preferential.  But the practice is controversial because it has historically been symptomatic of poor board oversight that has preceded bank failures.

Eagle’s proxy includes a brief paragraph revealing that insider loans in 2016 amounted to $82 million, or roughly 10% of Tier 1 Capital, with an ending balance of $52 million. An Eagle representative stated that this total consists primarily of credit lines to the bank’s Directors. Since Eagle has disclosed related party loans to the Directors and not Mr. Paul, our FDIC attorney consultant questioned if the board has approved the loans financing Paul’s companies.

On the surface, it seems possible that the board could be unaware of the existence of the loans involving Paul.  But documents filed in the Matchbox case (here) demonstrate that Directors Harvey Goodman, Steve Fanaroff, and Robert Pincus (the recently retired Vice Chairman) invested with Paul and Bensignor in Matchbox.   

Director Goodman signed as a Matchbox investor using his Forum Hill Partners, LLC and KLD-HMG, Ltd entities. Glaringly, this investment appears to be financed by Eagle since Maryland UCC filings reveal that Eagle has lent money to Forum Hill (below).

Eagle’s Chairman of the Audit Committee, a former area car dealer named Dudley Dworken, is directly responsible for “minding the store” and approving the related party transactions at the bank.  But we were alarmed to learn that after joining the board of Eagle in 1997, Mr. Dworken consented to a permanent injunction with the SEC in 1998 to settle insider trading allegations (without admitting or denying wrongdoing).  The allegations centered on his conduct while on the board of Allegiance Banc Corporation, a different bank that Mr. Paul was also a Director of (a media profile states that Dworken has been a “close friend” of Paul since the 1980s).

Source: SEC News Digest

Eagle has also made loans to finance the business ventures of Dworken and another member of the audit committee, Norman Pozez.  Pozez is the CEO of a retail toy company, Ridemakerz, that a Delaware UCC filing states is financed by Eagle.  A Maryland UCC filing similarly demonstrates that Eagle is financing Dworken’s Frederick Road, LLC entity which appears to be a real estate venture of some kind.

We See Enormous Downside Potential in EGBN Shares

Many investors seem to believe that Eagle offers robust growth and outsized returns with minimal risk. But since the first undisclosed fraud suit was filed, CEO Ronald Paul and his wife have made 19 open market sales to dump over $10 million of stock (list of trades here).  Prior to this time, Mr. Paul never sold a single share throughout his entire multi-decade tenure at the company, according to data from Bloomberg. Four Board Members have also sold stock in the open market this year.

The fundamental problem is that Paul is selling his stock to investors that are likely completely unaware of the pervasive undisclosed activity occurring at the bank.  That’s why we believe it’s imperative that Mr. Paul release the information that he and the board possess.  Eagle should immediately disclose:

1. An itemized list with names and principal balances for each loan to Officers, Directors, and their family entities including companies where they hold a financial stake.
2. An itemized list of all loans to Eagle borrowers that Officers, Directors, or their family entities have obtained a financial interest in along with a detailed explanation of how that interest was obtained.   This should include the aggregate balance of loans to real estate developers that insiders have engaged in joint ventures with.
3. The terms of each and every one of the loans from 1 and 2 including interest rate, loan to value or leverage point, and the existence of any restructuring or modification.
4. Attestations that these transactions were disclosed to the Board of Directors, Federal Reserve examiners, and Eagle’s independent auditors.

The fundamental problem is that insider self-dealing is often symptomatic of pervasive rot within the institution’s lending and risk management functions. History demonstrates that bad banks have been able to conceal the risks lurking in their portfolios during benign credit cycles, only to have them explode to the surface once the music stops. With shares trading at a premium valuation of over 2.4x book value, it is our belief that investors simply have yet to discount the true nature of Eagle’s activities. We therefore see significant downside potential in the stock.

All investors are encouraged to conduct their own due diligence

 

 

 

 

Exhibit A:  Forensic Trail of Documents Used to Identify Eagle Loans to RDP

 

1701 Rhode Island Avenue N.W. Washington DC

RDP’s website highlights the property as being a joint venture between RDP and Akridge.

RDPs website states that it is developing that YMCA at 1711 Rhode Island into an office building that will be renamed 1701 Rhode Island.  Washington DC deed records show a $63 million loan from Eagle to 1711 Rhode Island Owner, LLC secured by the YMCA Parcel.  The loan is signed for by a representative of Alcion Ventures, a partner of Akridge, but we don’t have enough information to know the size of RDP’s interest in the development.

1319 South Capitol Street S.W. Washington DC

RDP’s website describes this property as a future mixed-use development.

Deed records show that Eagle made a $7.5 million loan in 2015 (later up-sized to $9.3 million) to finance the purchase of the vacant parcel.  The loan was made to an LLC, 1319 Capitol Associates, managed by Paul’s family trust and signed for by RDP’s COO. The COO filed a form D for this LLC with the SEC in 2015 which disclosed it raised $5 million from 5 different investors.  An October 2016 image of the site shows a sign bearing RDP’s logo promising a future development. Shortly after the purchase, Mr. Paul told the Washington Business Journal that he was contemplating future development at the site but “we’re going to hold it for a while, we have no immediate plans. We believe the market is strong as ever”.

Tysons Center

RDP’s website describes this property as a joint venture with NVCommercial to produce a 2 million square foot mixed use development.

Deed records show that Eagle made a $34 million loan in 2014 secured by property at Tysons Center. The loan was made to Tysons Central LLC and was signed by a representative of NVCommercial.  We don’t have enough information to know the size of RDP’s interest in the deal. Also, a series of transactions recorded in 2017 suggest that at least one of the Tyson’s Center parcels was subsequently sold to entities owned by other developers.

One Florida Avenue & 8 P Street

RDP’s website describes this property as a gas station / convenience store that it plans to redevelop into a 230,000 square foot multi-family property.

Washington DC Tax Records confirm that this property is owned by RDP through an entity named St. Elmo LLC.  Deed records show that RDP purchased the property in August 2014 for $11.2 Million.

Deed records also show that Eagle made a $10.3 million loan in 2014 to Bethesda St. Elmo, LLC secured by this property.   The loan was signed by RDP’s COO on behalf of Potomac Investment Trust.

Documents from November 2016 show that Eagle made a separate $2.2 million loan to finance Bethesda St. Elmo’s purchase of an adjacent parcel at 8 P Street.  Our review of the deed records indicates that St. Elmo purchased the property from a different RDP entity, 8 P Street NE LLC, which had acquired the property shortly beforehand with a loan from Eagle.

700 Constitution Avenue

RDP’s website states this property is a joint venture between RDP and Borger Management to convert a hospital into a multi-family property.

Our review of deed records suggests that Eagle first made loans related to the property in October 2008. A September 2017 deed record shows that Eagle made a $35 million loan in September 2017 secured by a ground lease of the property.  The loan was made to an entity named 700 LLC and signed for by Thomas Borger.   We don’t have enough information to know the size of RDP’s stake in the deal.

2009 8^th Street

RDP’s website states that this property as a planned development of a nightclub into a multi-family apartment building.  Although not explicitly stated on RDP’s website, we believe this must be a joint venture with the Jefferson Apartment Group. The Washington Business Journal reported in 2016 that the property was owned by the Jefferson and stated that any development is at least a couple years away.

Deed records from June 2017 show that Eagle bank expanded its original $6.9 million loan secured by the property to $14 million.  The loan is made to a Delaware LLC named 2009 8^th Street Apartments and signed by a representative of Jefferson Apartment Group.  There is not enough information to know the size of RDP’s stake in the deal.

Collington Park Industrial Building

This is an Industrial property simultaneously displayed on RDP’s website as a “Venture Capital Investment” as well as an MRP website.  Deed records confirm the existence of a $11.9 Million loan from Eagle but the size of RDP’s stake in the deal is unknown.

1760 Reston Parkway

RDP’s website states that this property is a joint venture between RDP and Akridge to build a 22 story “trophy” office building.

A Delaware UCC filing shows an Eagle financing to 1760 Reston Investors, LLC, an entity that is registered to RDP’s headquarters address.  The filing states that Eagle is secured by the LLC’s interest in the property.

600 Rhode Island

RDP’s website states that this property is a joint venture between RDP and MRP that will be incorporated into a larger mixed-use development.

Deed records show that Eagle made a $5 million loan in 2016 secured by this property.  The loan was made to MRP 600 RI LLC and signed by an MRP representative.