More On Commercial Real Estate Foreclosures [Housing Tracker]

Commercial RE Foreclosures

Lenders Move to Foreclose on Macklowe Loan. New York City: “A group of lenders led by Deutsche Bank AG (DB) filed papers… to foreclose on a $510 million loan that Macklowe Properties Inc. took out to build on the former site of the Drake Hotel on Park Avenue… Earlier this year, Harry Macklowe was forced to give to Deutsche Bank control of seven Manhattan skyscrapers he purchased for $7 billion at the top of the market in 2007… Macklowe Properties bought the Drake Hotel in 2006 for $418 million… Macklowe has been in default on the Drake loan since November 2007.” (WSJ, Sept. 4) 

Foreclosure Notice Filed against Western Utah Copper Company Inc. ("WUCC"), a Subsidiary of Copper King Mining Corporation ("CPRK").  “Lenders have filed a Notice of Default against Western Utah Copper Company Inc. which is located in Milford, Utah. WUCC is reportedly a wholly owned subsidiary of CPRK. The lenders are foreclosing for lack of payment on a 1st Deed of Trust and also on a 2nd Deed of Trust. The collateral that is secured by these Deeds include, but is not limited to: State land leases, water rights, unpatented mining claims, patented mining claims and other collateral as described in the Deeds of Trust. WUCC has been in default to the Lenders for over one year.” (MarketWatch, Sept. 3) 

Cupertino Square Owners File For Bankruptcy. California: “The owners of Cupertino Square Shopping Center… have filed for bankruptcy. Jim Evans, an attorney in Los Angeles representing the mall, said the Chapter 11 filing… was intended to give Cupertino Square owners some time, prevent a foreclosure sale scheduled for next week… The Cupertino mall owners will try to find new investors or perhaps a new lender to help complete the $190 million renovation started two years ago. Evans: The mall owners… had no choice but to file for bankruptcy… because project lender Gramercy Capital (GKK), claimed Cupertino Square had defaulted on its loan — which Cupertino Square strongly denies.” (San Jose Mercury News, Sept. 3) 

Six Flags Mall Reopens With A New Owner. Texas: The Six Flags Mall was sold back to the International Bank of Commerce in Corpus Christi at a foreclosure auction Tuesday after the mall owner failed to pay the entire remaining debt owed to the bank, said Harold Shockley Jr., bank president. The mall will operate as usual until a new owner is found, he said. Fort Worth-based Woodmont Co. is managing the property in the interim… Lenders have posted the mall for foreclosure six times in the past year. The mall’s ownership, which has been led by Tom Morris, in 1999 borrowed $11.7 million from International Bank of Commerce.” (Star Telegram, Sept. 3)

Sunrise Mall Sold To IBC Bank For $6.5 Million. Corpus Christi, Texas: “Sunrise Mall has been sold for $6.5 million to IBC Bank during a foreclosure auction held Tuesday morning. The auction came after months of financial troubles for Sunrise, LP., which had been delinquent on its mortgage payments and electric bills.” (KRISTV, Sept. 3)

$88M Loan Package For Sale. “The Carlton Group Ltd. is handling the sale of $88 million in Florida-asset backed performing, subperforming and nonperforming loans for an undisclosed regional bank. Financial institutions typically try to sell off sour loans to investors, rather than go through the foreclosure process and bad publicity. Carlton Group VP John MacConnell: The 20 residential and commercial assets securing the loans are made up of residential and commercial properties, including a 60-wet-slip marina near Bradenton. Collateral includes townhomes, single-family residences and condominium properties in various stages of development; office condo projects; small-balance commercial loans; and land assets including waterfront property.” (South Florida Business Journal, Sept. 3)

Foreclosure Lawsuits Threaten Talbott's Status As Land Baron. Florida: The other shoe has dropped for Boca Raton land baron Gregory Talbott. Fifth Third Bancorp (FITB) last month filed $47 million worth of foreclosure lawsuits against Talbott, capping a months-long battle between the prominent developer and his once-friendly Cincinnati bank. The foreclosure lawsuits seek to grab Talbott's properties in Broward and Palm Beach counties, including prime downtown Boca Raton land, plus Talbott's 11,800-square foot estate on the Intracoastal in Boca. The moves put in jeopardy Talbott's South Florida real estate empire and could defrock his standing as the second largest owner of commercial property in downtown Boca Raton.” (Palm Beach Post via TMC Net, Sept. 2) 

Blaine Hotel Builders Sued. Minnesota: “The developers of a 98-room hotel near the National Sports Center in Blaine are facing foreclosure after defaulting on $5 million in construction financing. Home Federal Savings Bank of Rochester is suing Blaine Hospitality of Bemidji, Minn., its partners and several subcontractors who have mechanics liens against the hotel property. Michelle Jester, a Minneapolis attorney representing Home Federal, last week declined to comment about the complaint.” (Minnesota Star Tribune, Aug. 31) 

Lenders to Tropicana: Sell Indiana Casino. “Secured lenders in the Tropicana Entertainment LLC Chapter 11 bankruptcy case… want the debtor to complete the sale of its Evansville, Indiana casino as agreed to, prior to filing for bankruptcy… Earlier this month would-be buyer Eldorado Resorts LLC of Reno, Nev., [filed a motion] to compel Tropicana to decide whether to move forward with the sale prior to the existing Sept. 28 deadline. Earlier this year, Eldorado agreed to buy Casino Aztar for $220M-$245 million, depending on the property’s performance during the first year under the new ownership. Tropicana declared bankruptcy about two months later, technically allowing them to get out of the agreement.” (Globe St., Aug. 26)

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