May 11, 2010
Citadine (1299 Bush): NOD Filed As Lienholders Continue To Line Up
The mechanics liens now total over four million, and as a plugged-in reader noted last month, a Notice of Default (NOD) was filed on Citadine (1299 Bush) with $14,594,856 past due on a $15,500,000 note. Plugged-in people shouldn’t have been caught by surprise.
No update on the attempted pre-emptive bulk sale of the building. Tipsters?
∙ From Bulk(y) To Lien For Citadine At 1299 Bush [SocketSite]
∙ The Citadine (1299 Bush) Scoop: Seeking A Bulk Sale Of The Building [SocketSite]
∙ Citadine (1299 Bush): Current Pricing And A Peek Inside [SocketSite]
∙ Citadine Cuts Between Four And Ten Percent For Listed Condos [SocketSite]
First Published: May 11, 2010 1:30 PM
Comments from "Plugged In" Readers
There's nothing price won't fix.
Yeah yeah, I know I sound like a broken record, but it's true.
Posted by: scurvy at May 11, 2010 2:35 PM
If these units are worth less than what has already been spent, then it won't be possible to squeeze Humpty Dumpty back into the tube. Price can move units, but the only possible fix starts with the lender accounting for the mess on their balance sheets. Taking responsibility for this scale of failure is never easy.
Posted by: Mole Man at May 11, 2010 3:31 PM
A mechanic's lien??? What happened to the construction loan proceeds which were supposed to go toward building mateials and labor? I don't understand how the developer got away with not paying their construction crews.
Posted by: Live Smart at May 11, 2010 3:41 PM
Mole Man, sure it's easy. It's just an expensed write-off. That's what that column on the balance sheet is for.
The bank might not like, but that's all it's going to get and its only choice. These units wouldn't have sold at the asking prices even at the mania's peak.
Posted by: scurvy at May 11, 2010 4:03 PM
Live Smart, the developers had to pay themselves salaries, perks, and "performance bonuses" out of the loans. The money for the builders (and the loan balance) was going to come from the $1000/sf they got for run-of-the-mill condos in the Tenderloin. That plan worked out pretty well, I suspect -- for the developers.
Posted by: A.T. at May 11, 2010 5:08 PM
Bulk sale makes no sense, unless they do not have CFO's due to intractable f*ck ups. Something major gotta be wrong, otherwise the bank can just hire it's choice of local RE offices that will be more than happy to take sales over, make up pretty brochures and web sites all day long. At the right price these will sell no problem. Bulk selling is going to yield low $400's PSQ at best, and which will probably kill everyone except first lien holder, perhaps.
Posted by: 45yo hipster at May 11, 2010 5:13 PM
Scurvy - There's nothing EQUITY, as in developer equity, won't fix.
Having been in the situation where a my new HOA was dealing with mechanic's liens, I'd hate to be a buyer in this building - for the next five years.
Posted by: Dede at May 11, 2010 8:33 PM
Dede, all of that invested equity is sunk opportunity cost. If they had a lot of equity, one would assume they'd do that to get the pricing they want. Well, they're not going to get the pricing they offered......not in my lifetime. They couldn't get it at the once in a generation peak, why would they get it anytime in the next 30 years?
Equity only buys you time, it doesn't buy you profits. Time, as they say, is money.
Posted by: scurvy at May 12, 2010 9:20 AM