Commercial Foreclosures in Multimillions in Some Florida Counties

Posted on 29 March, 2013 by Jodee Redmond

The commercial property market has not been immune to the effects of the foreclosure crisis. Years after the real estate boom went bust, Southwest Florida has seen some multimillion dollar commercial foreclosures in Lee and Collier counties.

While there doesn’t appear to be a large second wave of trouble brewing for properties in these areas, there have been some big numbers involved over the past 12 months.

Until now lenders have held off taking the step of foreclosing on buyers who ran into financial difficulty with larger commercial loans. But banks have reached the point where they either can’t or won’t extend this courtesy to their commercial customers anymore.

Jeff Tumbarello, director of the Southwest Florida Real Estate Investment Association, compared it to eating the proverbial elephant;

“They took the little bites first,” he said. “Now they are having to take the big bites in the end.”

An example of a lender taking a big bite happened last October when Variable Annuity Life Insurance Co., which is a subsidiary of AIG, took over the Riverview Corporate Center in Bonita Springs after obtaining a $50 million judgment. The nine buildings included in the foreclosure were owned by Riverview Properties of Southwest Florida LLC. The company had ties to McGarvey Development Co.

AIG has foreclosed on a number of other McGarvey projects over the past eight months after getting foreclosure judgments in Lee County. These properties included the Renaissance Center on Marketplace Road and the twin office buildings of the Bonita Bay Executive Center.

According to Fort Myers real estate consultant Paige Rausch, there have been a number of smaller judgments as well. The number of foreclosures in the commercial market has slowed considerably over the past six months, despite the large dollar figures involved in some of the judgments, she pointed out.

Randy Mercer, a founding partner with commercial real estate firm CRE Consultants in Fort Myers, said recently that he feels the number of commercial foreclosures had bottomed out. His firm is managing the properties that have been taken over by AIG, including the Riverview Corporate Center but is not planning to put the properties on the market right away.

“At some point in time down the road we will be involved in the disposition side. When that is, I don’t know really. We haven’t had those discussions yet,” he said.

Some of the biggest foreclosure judgments have been handed down in Lee County. The largest one in the region came in 2010. It involved Grosse Point Development and three of the company’s projects, one of which was a waterfront community called Tarpon Point in Cape Coral. The lender, SNSPF Interim Finance B.V. foreclosed on a loan for a record amount of $339.8 million.

Another large foreclosure took place the same year when Bank of America filed an action against the developer of the Oasis, a high-rise condominium complex in downtown Fort Myers. The judgment against TRG Oasis Ltd, a subsidiary of The Related Group, was for $154 million.

In Lee County, the market has already seen $600 million in foreclosure judgments on 200 commercial properties. The lenders retook possession and the properties were resold for approximately $250 million.

According to Rausch, there is still about $1.5 billion in commercial property that is owned by banks or lenders or is in the foreclosure pipeline in Lee County.

“To put that into perspective, the overall just value of properties in Lee County is $68 billion, according to the Lee County Property Appraiser’s calculations in 2012, and the market will simply see those assets recycled to new owners,” he said.




Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Recent Posts

The latest property data has identified Newquay as the fastest property seller’s market in the UK

Investing in your garden can increase your property’s value

French Riviera temping high-end homebuyers

How can the ownership rights of my commercial property impact a business sale?

Should I incorporate virtual property viewings permanently?

Investment expected to increase across Asia-Pacific in 2021

UK property industry slows as the conclusion of tax break looms

BNP Paribas cautioned investors on Friday as debt-trading bonanza that increased its earnings this past year

Over 300,000 property purchases fell through in 2020 – we show the most frequent motives and the best way to get your house sale back on track

House Prices in the Capital Surpass £500,000

Optimism from the Bank of England’s chief economist

The most expensive commercial properties.

Businesses operating from shared premises will miss out on grants

BA cuts 12,000 jobs, unions hit back

Media Streaming Service See Record Subscriptions

Covid-19 Causes Millions To Claim UK Furlough Scheme