Rumor Mill: Loop Calhoun Project in Foreclosure?

by Alex Stenback on March 12, 2008

Updated 3/14 8.30a: To include comments offered by representative of the Loop Calhoun.

Loop_logo From more than one reliable source, we have it that the Loop Calhoun condo project is in Foreclosure.  The foreclosing construction lender is M & I Bank, allegedly defaulting party is Mathwig Development.

Again, this is to be filed in the semi-substantiated rumor mill – anyone with more details feel free to share in the comments.

Now, just because a condo project is in foreclosure does not mean it is dead – in many cases the lender simply takes over the development, and continues to market the properties – In for a dime, in for a dollar as they say.  Sometimes a bank starts by replacing the sales team and other key players, but there are dozens of ways this can play out, and we don’t have nearly enough information to make any representations as to exactly how this will unfold. See update below.

Now, in some cases, projects in foreclosure might represent an opportunity to get a better deal on a purchase – whether that is true here is another matter entirely. Again, see update below.

UPDATE 3/14 8:30 AM: Late yesterday, we were contacted by a representative of the Loop Calhoun Project who offered up some details.  Though they declined to be named or quoted, but we can confirm that they are closely affiliated with the project at a very high level. So here’s the scoop:

  • That the Loop Calhoun is in Foreclosure, and that event occured last Friday.
  • The foreclosure itself was characterized as an administrative action to expedite the clearing of disputed mechanics liens on the project resulting from the ouster of the original General Contractor.
  • That it is business as usual at the Loop – no changes to management, the sales team, etc. are in the works.
  • The bank is happy, they are happy, and it is business-as-usual down there, and sales are relatively strong. In other words, if you are a vulture, don’t plan on having Loop Calhoun as a carcass to pick on – they aren’t conceding dollar one on price.

Feel free to share any details in the comments or via email, but be careful – these are peoples businesses and livelihoods we are talking about, so any comments that smack of axe-grinding, piling on, etc. won’t be tolerated, but if you have verifiable information to share, please do so.

{ 8 comments… read them below or add one }

SG March 15, 2008 at 5:43 pm

The project is in foreclosure, yet everyone is happy, it’s business as usual, and sales are strong? Tell me that doesn’t sound a little suspect. Maybe I’m wrong, but wouldn’t a thriving condo project find a way to avoid the entire foreclosure process at all costs?

I see a Bear Stearns situation potentially happening here. There will be rumors about whether or not the project is really in trouble because of the foreclosure, which will cause people to shy away from the project and / or pull out of deals. This could compound and ultimately put them into a more serious foreclosure situation…if they aren’t really already in one.

I’m a renter in the city right now looking to buy a condo in the 400K – 500K range, so basically right where Loop Calhoun is. I can tell you right now that with this kind of speculation attached to a project I wouldn’t touch it. Maybe that’s just me though.

Johnny Northside March 17, 2008 at 12:50 am

Alex Stenback delivers the goods again. Great work.

WL March 17, 2008 at 12:27 pm

Yeah they’re not conceding dollar one? You know how apt lenders are to loan money to home owners looking to buy in a property that is listed as in foreclosure. Please, they are screwed.

Erik Johnson April 3, 2008 at 10:38 am

SG,

Go a bit further west on Lake Street to the Uptown Chateau, slightly below your price range and the quality is out of this world.

http://www.livesouthoffrance.com

Tim Matthews April 15, 2008 at 10:41 am

A friend was a buyer in that development. Before she closed she was notified from her lender that she could not close as there was $8 million dollar mechanic’s lien. That said, in a new construction project, the Mechanic’s Liens take senior position to the Bank Loans. The fact is that no one can close on any units until these various of liens/foreclosures are out there. ALTHOUGH, the Sales staff at the loop said that ONE title company in Delano would do the closing and guarantee the title. HMMMMMMM…sounds fishy!!!!!!!! This will end in Tragedy.

ks April 18, 2008 at 3:27 pm

Erik,

I have also heard great things about the Uptown Chateau. In that price point they are hard to beat.

KS

Jose May 16, 2008 at 11:21 pm

m&i bank is forcing companies into bankruptcy and foreclosing all properties and last known number of builders in the Phoenix area is said to be 14. What concerns and scares me is that more the half were not in default and have current on payments. But yet m&i bank is still seizing properties and destroying everything these honest, hard working, ethical, good people have established and built over the years only to claim that it is in the best interest of the bank. It does not make sense, the notes are being paid and the bank is still out to destroy companies.

QJ June 12, 2008 at 11:34 pm

“What concerns and scares me is that more the half were not in default and have current on payments”

That’s BS, I do commercial developements myself and the Bank cannot “force” you into foreclosure if you’re current on your payments.

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