Condo Complex Goes to Lender

[PerryChase]

Maisel-Presley owes $35 million on project
By Mike Freeman
UNION-TRIBUNE STAFF WRITER
http://www.signonsandiego.com/news/business/20070111-9999-1b11condo.html

January 11, 2007

A 280-unit Oceanside condominium complex from one of the county’s most prolific condo converters has been taken over by its largest lender.

Developer Maisel-Presley agreed to hand the keys to the River Oaks project over to Bank of America last month after the bank initiated a foreclosure proceeding, according to court records. The bank lent $48 million on the project in July 2005. It is owed about $35 million.

Though a couple of small conversions have defaulted on their loans, this is believed to be the first large project in recent years to go back to its lender in San Diego County, based on a search of county deed records by The San Diego Union Tribune.

[Daniel]

Thanks for posting this, Perry. I also wonder how the UTC converters are doing nowadays.

[no_such_reality]

Ouch 5987 units selling in current and future phases for just conversions.

that’s a lot of apartments coming back to the rental pool. Add the 5000 downtown new units and you’re over 10,000 condos coming into the market.

[Bugs]

They’ve got enough other projects, I wonder why the lender didn’t make them extract some equity from one of their other projects?

[PerryChase]

I remember someone on this board, previously make a call on MP Condos. Please stand up and take the credit.

[no_such_reality]

They’ve got enough other projects, I wonder why the lender didn’t make them extract some equity from one of their other projects?

Um, because losing $7 million on one deal is better than losing $25 million on five deals.

[Bugs]

That’s kinda the point I was trying to make. If MPs projects are all at risk – and I think most of them probably are – the lenders should have called all of them. Better to start liquidating now than to have to do it next year under even less favorable conditions.

MP should not survive as a company if it can’t service its debts.

[contraman]

Daniel, word on the street is that Regents of La Jolla is about to go back to the bank if it already hasn’t…

We are going to witness one hell of a housing crash here…everybody take notes for the next go around…

Sincerely, Contraman

[davelj]

I was the one – although perhaps there were others – that mentioned here that MP would likely run into problems at some point. I don’t have time at the moment, but I’ll show you why MP’s principals will still make out like bandits even if several of these projects end up underwater. First clue: most are financed by different banks and are structured as separate entities that aren’t tied together. As long as MP puts up its 20%-25% equity into the deal generally the lender won’t ask for personal guarantees or additional corporate guarantees. But I gotta run for now…

[SD Realtor]

Regents had changed ownership last spring. The original owners found someone to take it off thier hands. The homeowners were pissed because the subsequent phase releases were selling at reduced prices. However even those phase releases were WAY overpriced for the area. So what you say wouldn’t surprise me a bit contra…

SD Realtor

[Critter]

Maisel Presley has left the building (to the lender).

[Author]

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