Archive for the ‘Bankruptcies’ Category
Friday, September 9th, 2011
A strategy by a Nevada real estate company may set a new precedent for investors attempting to reorganize under Chapter 11 bankruptcy protection. According to the National Real Estate Investor, by merging several single-asset operating companies, Whitton Corp. has avoided onerous restrictions that federal bankruptcy law places on property owners with only one asset. The U.S. bankruptcy court has allowed Whitton to file, even though most of its creditors claim they showed bad faith by merging the day before.
The merger changed Whitton into a multi-asset owner from a group of single-asset operating companies, limiting each mortgage lender’s ability to block the reorganization and foreclose on properties used as collateral. Under the U.S. bankruptcy code, single-asset property owners are affected when filing for bankruptcy protection with a measure that establishes a 90-day deadline to either file a reorganization plan, or to begin making regular interest payments on the principal balance owed on the loan.
To read the full article from the National Real Estate Investor, click here.
Posted in Bankruptcies, Financial Services, Real Property, Western | No Comments »
Thursday, September 8th, 2011
A lingering cloud of uncertainty remains as the economy entered a period of stagnation a few months back as confirmed by an August job report. According to GlobeSt.com, despite the disappointing job figures, drivers that make investing in commercial real estate favorable are still intact. The main reason for this is the fact that corporations are remaining cautious, but not panicking. Also, consumer spending habits have obviously changed in the past three years, but they are not pulling back on spending in a pattern that would cause for severe panic.
It still appears that things will worsen before they get better, but the fear of massive loss in tenants and declaring bankruptcy is not as big as it was a short while ago. Truthfully, commercial property markets have stabilized, and some are in recovery and may stagnate as a result of the stall in job growth. The ups and downs of the economy in August did not generally disrupt the pipeline for commercial property deals. Some large transactions were pushed backed slightly but there were no signs of the extreme panic of 2008 and 2009 amongst buyers and lenders.
Posted in Bankruptcies, Economy, Financial Services, Real Property | No Comments »
Thursday, February 17th, 2011
Borders Group has filed for reorganization relief under Chapter 11 of the Bankruptcy Code, a forgone solution for the company by many analysts in the commercial real estate industry. According to an article from the National Real Estate Investor, Borders lacks the capital resources essential for it to move forward with its business strategy to reposition itself successfully for the long-term. Chapter 11 will give the company a chance to infuse capital and reorganize itself into a new position in the market.
Borders will be able to run their business while under Chapter 11 through $505 million in debtor-in-possession financing from GE Capital and other investors. The company plans to close some 200 stores in the near future, with some of the underperforming ones as soon as over the next few weeks. The bulk of the stores will remain open for business during the filing and reorganization period. This is yet another sign of the times in the retail market and another warning as to how many retailers need to reevaluate how they relate directly to the consumer.
Posted in Bankruptcies, Financial Services, Real Property, Retail, Store Chains | No Comments »
Tuesday, November 9th, 2010
New data points, such as the delinquency rate for securitized commercial real estate loans falling in October for the first time in more than a year, are painting a picture of slowly moderating pain in commercial real estate. According to The Wall Street Journal, the drop came as distressed loans were being liquidated at a more rapid pace with the biggest reason for the decline being the exit from bankruptcy of hotel chain Extended Stay America Inc.
The 0.47% drop of the delinquency rate in October could mean that “special servicers” charged with working out bad loans on offices, retail stores and other kinds of commercial property are getting a hold of how to deal with the fallout from the real estate bust. With it looking as if rents and vacancy rates in commercial real estate are close to stabilizing, holders of foreclosed property could be encouraged to sell now rather than wait.
To read the full article from The Wall Street Journal, click here.
Posted in Bankruptcies, Financial Services, Foreclosures, Hospitality, Office, Real Property, Retail | No Comments »
Friday, October 22nd, 2010
General Growth Properties Inc. is preparing to emerge from Chapter 11 in early November, becoming one of the first and one of the largest REITs to climb out of bankruptcy. According to GlobeSt.com, GGP will emerge from the financial restructuring with a strong balance sheet and substantially less debt thanks to $6.8 billion in equity from a variety of institutions. This proves that, in the right circumstance, bankruptcy works and can be the only way to protect everyone’s interest.
Any pre-Chapter 11 GGP creditors will be satisfied in full and GGP itself will separate into two publicly traded corporations upon emergence with current shareholders receiving common stock in both companies. Most REITs that have filed for bankruptcy have historically ended up dissolving or even worse left their equity shareholders with nothing. GGP differed in its planning and shareholder investment, preparing for the filing four months before it took place and hiring investment bankers and restructuring advisors.
To read the full article from GlobeSt.com, click here.
Posted in Bankruptcies, Financial Services, Real Property | No Comments »
Tuesday, October 12th, 2010
Updating on an August post about Southeast Georgia’s Sea Island filing for bankruptcy, it has now been made public by the AP that the resort has been sold in auction for $212 million. According to the Atlanta Business Chronicle, the bidders; Oaktree Capital Management, Capital Avenue Group, Starwood Capital Group and the Anschutz Corporation all partnered on the deal.
The Chapter 11 filing, listing 1,000+ creditors that are owed up to $1 billion, coincided with an agreement to sell Sea Island’s assets to Avenue Capital and Oaktree Capital for $197.5 million. The bankruptcy judge had previously rejected an offer from Starwood Capital group for $199 million, which then removed themselves from initial bidding. Fallout from the recession ultimately has ravaged the historic five-star resort which had had to lay off hundreds of employees over the past couple years.
To read the full article from the Atlanta Business Chronicle, click here.
To see Paradigm’s August 11, 2010 post on Sea Islands’ bankruptcy filing, click here.
Posted in Bankruptcies, Eastern, Financial Services, Hospitality, Paradigm Info, Real Property, Resorts | No Comments »
Thursday, September 23rd, 2010
Dallas, Texas-based Blockbuster has filed for Chapter 11 bankruptcy in order to secure $125 million in debtor-in-possession financing to help the company maintain operations through the reorganization process. According to the Dallas Business Journal, the reorganization plan will reduce Blockbusters’ debt from $1 billion to $100 million or less.
All stores, DVD vending kiosks, franchise-operated stores and by-mail and digital businesses are up and operating but Dallas commercial real estate professionals believe the Chapter 11 filing will result in more store closings, leaving commercial real estate available in prime suburban neighborhoods. All 3,000 stores in the United States will remain open, but Blockbuster will be reviewing its store portfolio to enhance profitability.
To read the full article from the Dallas Business Journal, click here.
Posted in Bankruptcies, Financial Services, Real Property, Retail, Store Chains, Strip Centers | No Comments »
Friday, September 17th, 2010
Breckenridge Edison Development, owner of the Sheraton St. Louis City, Missouri Center Hotel & Suites, filed for Chapter 11 bankruptcy. According to the St. Louis Business Journal, the move put off a foreclosure auction that was scheduled for hours later after the bankruptcy was filed. The 228-room hotel lists assets of about $14 million and liabilities of $33 million.
Breckenridge was overdue by 90 days on a $26 million outstanding mortgage-backed securities loan. Despite the filing, the Sheraton will operate business as usual. About $117 million in local mortgage-based securities loans on 17 properties were delinquent on payments by 60 days or more, a number up from 14 properties that were delinquent on $111.6 million a year ago.
To read the full article from the St. Louis Business Journal, click here.
Posted in Bankruptcies, Financial Services, Hospitality, Hotels, Mid America, Real Property | No Comments »
Wednesday, August 25th, 2010
Irving, Texas-based Omni Hotels & Resorts has a $67.1 million bid out to acquire the luxury Amelia Island Plantation resort located 29 miles north of Jacksonville, Florida. The resort is currently in Chapter 11 bankruptcy. According to the Dallas Business Journal, Omni’s bid is currently the highest submitted and completion of the sale depends on Omni gaining the approval of a Florida bankruptcy court expected later on this week.
If the approval goes as planned, Omni will take full ownership of the resort in the fall of this year. Omni has growth plans for the resort including adding 125 rooms and suites and a 16,000-square-foot ballroom. The acquisition is part of the companies brand expansion plan which in the past few years has included resorts in Pennsylvania and New Hampshire.
To read the full article from the Dallas Business Journal, click here.
Posted in Bankruptcies, Eastern, Financial Services, Hospitality, Hotels, Mid America, Real Property, Resorts | No Comments »
Friday, August 20th, 2010
The Comfort Suites in Lake George, New York recently filed for Chapter 11 bankruptcy protection in an effort to stop the foreclosure process. The hotel will remain open and operating while it reorganizes finances during the bankruptcy period. With 98-rooms and $13.4 million in assets, the hotel has amassed upwards of $11.2 million of debt.
According to the Business Review, $7 million of Comfort Suites debt is owed on its mortgage with CIT Lending Services Corp., which has started foreclosure proceedings. Other debts include a $2 million SBA loan and $200,000 of unpaid property taxes. The hotel also owes $21,000 of franchise fees to Choice Hotels International Inc.
To read the full article from the Business Review, click here.
Posted in Bankruptcies, Eastern, Financial Services, Foreclosures, Hospitality, Hotels, Real Property | No Comments »
