Update: American Loft — It’s Somebody Else’s Problem Now
American Loft (pictured), that towering Northern Liberties testament to the mid-oughts real estate bubble and magical shit factory that was the development firm CREI, finally went to Sheriff’s Sale, just like we told you it would. And the winning bidder is… a company called American Street Lofts, who picked up the $15M building for a paltry $8.6M, which is nice for them, since the company was already called American Street Lofts. (What’s the deal with this kind of pre-Sheriff’s Sale collusion? Legal? Commonplace? School us in the comments.) Now comes the fun part: Trying to sell the 40 units in American Loft, which had previously ranged in price from $300K+ to $1M. CREI couldn’t even do it when banks were handing out mortgages like candy, so does the new owner just wait it out while American Loft becomes the coolest creepy old haunted house in NoLibs? Muwahahah. Ve vant you should ask us later.
June 3rd, 2009 at 11:08 am
Real estate companies, for a variety of reasons, will often create a different shell company to own each development. I assume that American Street Lofts was created in anticipation of bidding on this project.
The paper which shall not be named has an article today on the shit hitting the fan for high priced center city condos. Murano is auctioning off 40 units for 50% off (these prices are INSANE!).
June 3rd, 2009 at 12:12 pm
You know, you can look up corporate name info on the state’s website. Which I did.
American Loft LLC (or whatever just bought the property) has the same address as the lender, Abington Bank. So the bank likely moved the property out of it’s non-performing asset book, but retained some sort of control via a subsidiary company. That probably keeps it off the REO book, too.
I doubt they’d do this for most saingle family residence properties (they’d just keep it as REO until the could sell it), but this is probably common for assets of this size.
They were probably prepared to bid as much as the outstanding lending costs (if someone wanted to offer more than that they wouldn’t turn that offer down), but once the other bidders dropped out, then the deal went through at the $8.5M point.
June 3rd, 2009 at 1:43 pm
The collusion is indeed common. A sheriff’s sale is usually mired in red tape, and a fully prepared RE company with a sufficient, agreed-upon basket of cash is always welcome.
What’s kind of funny is that Philly residential real estate is only NOW starting to slide. Center City prices (even with a liberal definition of Center City that would include NoLibs and extend to, say, Reed Street) had not budged until about a month ago.