Whitehawk Declares Default on $80M Pacific Oak Loan, Sues in Nevada
Pacific Oak Strategic Opportunity REIT Inc. disclosed that its secured lender, Whitehawk Capital Partners LP, has issued formal demand letters declaring two events of default under the REIT’s $80 million credit facility and demanding immediate repayment of all outstanding obligations – opening a U.S. legal front in a financial unraveling that has played out in Israeli insolvency courts for months.
The demand letters, addressed to two Pacific Oak subsidiaries that serve as parent-entity guarantors under the credit agreement, were received April 29, Pacific Oak disclosed Wednesday. The company said it is disputing the default and has reserved “all of its rights and defenses.”
Whitehawk is also seeking court intervention. On May 19, the lender filed a complaint and motion for a temporary restraining order in Clark County District Court in Nevada, seeking to enjoin two Pacific Oak subsidiaries from encumbering, transferring, or otherwise impairing North Las Vegas real property that serves as principal collateral under the credit agreement, the filing said.
The Whitehawk facility was originally structured as a lifeline. Pacific Oak entered into the $80 million credit agreement with Whitehawk in July 2025, using a portion of the proceeds to repay its Israeli Series C bonds. The loan was secured by three properties: the Park Highlands land holdings, the Richardson lands, and a development site at 210 West 31st St. in New York.
Whitehawk now argues that Pacific Oak triggered default on that same loan within weeks of signing it. The lender claims the first event of default occurred on or about Aug. 19, 2025, when Pacific Oak’s indirect parent subsidiary – Pacific Oak SOR (BVI) Holdings Ltd., a British Virgin Islands entity – entered into a restrictive agreement with a separate group of Israeli bondholders and their trustee, Reznik Paz Nevo Trust Ltd. Whitehawk contends that agreement violated covenant restrictions in the credit agreement and constitutes an “immediate and uncurable” event of default.
The second alleged default stems from events that followed. Israeli bondholders commenced insolvency proceedings against the BVI subsidiary on or about Dec. 26, 2025. On Feb. 8, 2026, a court in those proceedings entered an order directing a vote on BVI’s proposed debt arrangement. Whitehawk says that order itself constitutes a continuing event of default under the credit agreement.
On that basis, Whitehawk claims all obligations under the credit agreement became automatically due and payable on or before Feb. 8. The lender also states that default-rate interest has been accruing since Aug. 19, 2025 – more than nine months ago. Pacific Oak said additional amounts are owed beyond the $80 million principal, including accrued default-rate interest and an exit fee, and that it is “in the process of evaluating” the total.
Whitehawk also flagged in its letters that it believes “a significant number of additional defaults and events of default may exist” beyond the two it has formally alleged. Pacific Oak said those assertions are similarly under review by its legal counsel.
A Documented Decline
The latest development extends a distress saga AltsWire has tracked for the better part of a year. In August 2025, Pacific Oak disclosed “substantial doubt” about its ability to continue as a going concern, reporting $512.8 million in debt maturing within the year and $52 million in real estate impairments for the quarter ended June 30, 2025, alone.
Then, in February 2026, the board moved to replace the company’s top executives. Brian Ragsdale was appointed to serve simultaneously as president, chief executive officer, and chief financial officer. The same month, the board dissolved its audit committee and announced the company would cease filing standard annual and quarterly reports with the SEC.
In March 2026, AltsWire reported that the board had walked back its earlier plan to seek stockholder approval of a formal liquidation, choosing instead to focus on the Israeli debt proceedings. The board cited the company’s “limited cash on hand” and dependence on BVI for funding, noting that the timing and amounts of future funding from BVI were “extremely uncertain.”
Investors who remain in the REIT have found themselves with limited options. Pacific Oak suspended its share redemption program in July 2024. Shares have traded on secondary markets for as little as $1.70, according to publicly available data – a steep discount for investors who entered the REIT at offering prices well above that.
The immediate legal question now is whether Pacific Oak can successfully challenge Whitehawk’s default assertions. The company has said its legal counsel is reviewing whether the alleged events of default in fact occurred and whether Whitehawk’s acceleration of obligations is valid.
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