3 posts tagged “corus bank”
A private-equity consortium led by Starwood Capital Group has picked up 40% of the Corus Bank portfolio in a transaction with the Federal Deposit Insurance Corporation (FDIC) according to a Wall Street Journal article. The FDIC seized roughly $4.5 billion in troubled real estate loans from Corus Bancshares just a few weeks ago, making Corus the 90th bank to be seized this year. The purchasing group, which includes Starwood, TPG Capital, Perry Capital and WLR LeFrak, will spend $554.4 million for a 40% managing stake in a company set up by the FDIC to hold $4.5 billion in mostly condominium loans, while the regulator will keep a 60% hold.
"We got a good price on it," FDIC Chairman Sheila Bair said in an interview in New York. "I think we will use this structure again, absolutely. We're pleased with the results." Eight bidders had vied to purchase a stake in the limited liability company set up to hold the assets, which include performing and non-performing construction loans and real estate-owned assets with an unpaid principal balance of roughly $4.5 billion, the FDIC said. Chicago-based MB Financial has already agreed to buy $7 billion worth of Corus's deposits, re-opening Corus Bank branches under the MB brand.
For more news and information visit Blumberg Capital Partners.
Corus Bank, N.A., Chicago, IL was closed in September by the Office of the Comptroller or the Currency, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. As of June 30, 2009, Corus Bank had total assets of $7 billion and total deposits of approximately $7 billion. By this Friday, about 10 investors are expected to submit bids to the FDIC for $5 billion in condominium loans and other property held by the failed Corus Bank according to the Wall Street Journal.
The auction, with loans backed by more than 100 real-estate developments, will be the largest bulk sale of commercial property since the financial crisis began. "We are offering specialized investors an opportunity to purchase an equity stake" in up to $5 billion of Corus's loans, an FDIC spokesman said. "The more that the FDIC can obtain for the overall portfolio, the more we can recoup on behalf of the creditors and our deposit insurance fund." The Corus auction "is going to create a new mark," says Norman Radow, chief executive of Radco Cos., an Atlanta developer specializing in distressed condo projects across the U.S.
For more news and information visit Blumberg Capital Partners.
Designed by the Pritzker Prize winning French architect Jean Nouvel, the 23-story building at 100 Eleventh Avenue in Manhattan has the vision to become one of the hottest addresses in New York. Unfortunately, where a few years ago the same project may have sprung up effortlessly, the 100 Eleventh building sits nearly a year behind schedule and some $50 million over budget, a half-finished testament to the struggles in the market today.
Developers Craig Wood and Curtis Bashaw know that their company, Cape Advisors Inc., is under the gun to refinance its construction loan in the midst of pouring concrete, or it will risk the possibility of having to halt work next month according to several people familiar with the project. A Cape spokeswoman says that there is "huge interest" from potential investors. The developers could strike a deal with new investors as early as Friday, according to two people familiar with the deal. But that unnamed capital source is expected to get a 25% return, slashing into profits Cape hoped to see from the project, these people say.
Internal project documents reviewed by The Wall Street Journal paint a troubled picture. Cape Advisors, like many real-estate developers, failed to keep costs down amid construction problems and sprung for even more lavish fixtures and finishing touches midway through development. As costs mounted, Cape Advisors tried to raise money by replacing its $110 million construction loan from iStar Financial with a $126 million loan from condo specialist lender Corus Bank. But the Corus deal didn't gel, forcing Cape to look for more equity from outside investors. Cape has put in $19 million in cash as equity in the project, according to documents. Representatives for Corus declined to comment.
Making matters worse: the Manhattan real-estate market has begun to shown signs of weakness, according to Miller Samuel Inc., a market-research firm. Inventory of condos and co-ops are up 37% in July from the year before, and Jonathan Miller, Miller Samuel's chief executive, says market prices are "moving sideways," and he is concerned about how the market will perform in 2009.
For more real estate news and information, visit Blumberg Capital Partners.
