StanCorp sues Cushman & Wakefield, appraiser David Masters over Chasen valuations

StanCorp Mortgage Investors LLC has filed a federal lawsuit in U.S. District Court for the District of Maryland alleging that Cushman & Wakefield and appraiser David Masters produced inflated appraisals for properties in the Chasen Cos. portfolio, appraisals the lender says led to more than $210 million in loans and consequent loss and to defaults on 25 loans. The 17-page complaint centers on multi-family and at least one commercial building across Maryland and Virginia, and it names specific properties in Baltimore, including 817 St. Paul Street in Mount Vernon.

The complaint accuses appraisers of misstating property quality, inflating rent rolls and occupancy rates, and mischaracterizing renovation work. StanCorp contends the appraisals were “greatly inflated” and masked lending risk. The filing alleges violations of the Uniform Standards of Professional Appraisal Practice, saying appraisers failed on property inspections, data verification, and the use of extraordinary assumptions. StanCorp pleads causes of action that include negligence, gross negligence, professional negligence, vicarious liability, negligent misrepresentation, and breach of contract, and asks a judge to void appraisal agreements and to award damages, attorney fees, and interest.

The filing highlights 817 St. Paul Street as a vivid example. The appraisal allegedly listed “a mix of one, two and three bedroom units” when 61 units were actually studio apartments. Reported rents were pegged at $1,975 to $3,400 per unit, well above the Baltimore region's average asking rent of $1,502, and the appraisal described the building as having been “gut renovated” for $14,580,000, or $144,356 per unit. StanCorp says photographic evidence and a basic visual inspection would have contradicted the renovation claim.

The complaint singles out David Masters, identified as an appraiser with Cushman & Wakefield; the filing asserts he conducted at least 20 of the appraisals at issue. Cushman & Wakefield has not responded to the complaint and declined to comment, the filing record shows. The lender argues the appraisal agreements required USPAP compliance and that failure to meet those standards voided the contracts.

Market implications for Baltimore could be significant. If courts find the appraisals unreliable, banks and mortgage investors may tighten underwriting for Baltimore-area multifamily deals, potentially slowing investment and increasing financing costs for landlords. Appraisal disputes tied to a high-profile local developer like Brandon Chasen amplify scrutiny of valuations, which can feed through to borrower stability, property tax assessments, and neighborhood investment patterns in core areas such as Mount Vernon.

For readers, the next steps are court discovery and any motions to dismiss or for summary judgment, where appraisals, photos, rent rolls, and inspection notes will be tested. The case also raises policy questions about appraisal standards and oversight in Maryland. If StanCorp wins rescission or damages, lenders and appraisers may alter practices; if claims falter, investors might still face higher risk premiums. Reporters will monitor filings, responses from Cushman & Wakefield and David Masters, and local property records for 817 St. Paul Street to confirm unit counts, permits, and renovation claims.