Sentinel landlord loses property to f...

Sentinel landlord loses property to foreclosure

There are 8 comments on the Santa Cruz Sentinel story from Jun 26, 2009, titled Sentinel landlord loses property to foreclosure. In it, Santa Cruz Sentinel reports that:

A San Francisco company that bought $1.2 billion in property during the real estate boom lost some of it at a foreclosure auction Thursday.

Join the discussion below, or Read more at Santa Cruz Sentinel.

RobtA

Newark, CA

#1 Jun 26, 2009
Now, the minimum bid was MORE than the total previous purchase price. Presumably, the value of the loan was less than the previous purchase price (can't be sure, due to reverse mortgages). If so, the lender was seeking to make a capital gain on the sale.

It's like this:

"Help! I spent my last $5 on this six-pack of beer, and could only drink 2 of them. Who will buy the remaining 4 cans to help me out? Minimum bid $6."
disabuser

Portola Valley, CA

#2 Jun 26, 2009
RobtA wrote:
Now, the minimum bid was MORE than the total previous purchase price. Presumably, the value of the loan was less than the previous purchase price (can't be sure, due to reverse mortgages). If so, the lender was seeking to make a capital gain on the sale.
I have to wonder why the reporter didn't address that issue. Were commercial purchases being financed with not skin in the game by buyers? Further more is Merrill Lynch Capital now owned by Bank America? And if so is the loss in this going to be part of the taxpayer guarantee that was granted to Bank America after it threatened to back out of the Merrill acquisition? There was a congressional hearing on the deal yesterday.
Constant Reader

Santa Cruz, CA

#3 Jun 26, 2009
Come back to Santa Cruz, Sentinel. We miss you!
Consistent

United States

#4 Jun 26, 2009
Why would the new owner want to stay with the same lease company that was unable to find a tenant for the former owner for years? 60% vacant? Nice job.
Food For Thought

Modesto, CA

#5 Jun 26, 2009
RobtA wrote:
Now, the minimum bid was MORE than the total previous purchase price. Presumably, the value of the loan was less than the previous purchase price (can't be sure, due to reverse mortgages). If so, the lender was seeking to make a capital gain on the sale.
It's like this:
"Help! I spent my last $5 on this six-pack of beer, and could only drink 2 of them. Who will buy the remaining 4 cans to help me out? Minimum bid $6."
The debt for the property was $16,863,364, so even if did sell at the minimum bid, the company would still lose about $3.2 million.
Coulrophobia

Alviso, CA

#6 Jun 26, 2009
What jumbled reporting! Terrible
RobtA

Soquel, CA

#7 Jun 26, 2009
FFT: OK, the debt on the property was some $16 million. But to whom was that debt owed, and how much if it (if any) would remain collectible? It is not obvious that a sale for $13 million would really mean a $3 million loss, all in total

It seems that the debt exceeded the last two sales prices. That seems rather odd, don't you think? Since there were some rent-paying tenants, I doubt if the building was draining money in upkeep.

Or, maybe it was the case that debt exceeded prior purchase prices as part of a second-mortage "bubble" financing. If so, that's the problem of whoever holds the paper.
Benji

Santa Cruz, CA

#8 Jun 26, 2009
What? Santa Cruz has a newspaper? It's news to me.

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