Buyers lining up for Chicago's Corus Bank, struggling under Florida condo woes
Wake up and good morning. Though we're only days since Friday's failure of Alabama's Colonial Bank and its immediate sale by the Federal Deposit Insurance Corp. to BB&T, other troubled bank deals are well under way.
New York developer the Related Cos. and Lubert-Adler Partners LP, a Philadelphia real-estate investment firm, are teaming up to bid on the assets of struggling Chicago-based condo lender Corus Bank, whose loan woes are centered on Florida's overblown condominium market, according to the Wall Street Journal.
The potential buyers face a rival offer from Los Angeles private-equity fund Colony Capital LLC and iStar Financial Inc., the New York commercial-mortgage real-estate investment trust. Here's the Wall Street Journal story.
Why no traditional bank bidders? Probably because of its unusual structure. The Chicago Tribunedescribes Corus as a real estate investment trust with a bank as a side business.So basic banks are likely not listening to the Corus sales pitches. But REITs (real estate investment trusts) and private equity firms probably are.
Corus, you may recall, already stated it's unlikely it can raise fresh capital without the help of regulators, including the FDIC. Any actual sale may still be weeks away.
One of Tampa Bay's costliest property foreclosures, Lansbrook Village (see photo), a 774-unit condominium complex in Pinellas County's East Lake, was repossessed by a reluctant Corus last week failing to pay $75 million in debts.
And across the bay in Tampa, the Chicago bank also lent $84 million to Novare-Intown to build the Element, a 400-unit downtown condo tower (see photo below). Sales there collapsed along with the housing market, and developers decided to lease units pending a real estate recovery. Here's the St. Petersburg Times story on the Tampa Bay struggles.
The Journal story suggests the Related-Lubert team may have the inside track to Corus's assets in a sale brokered by the FDIC. If successful, Lubert-Adler and Related would provide funding for any purchase and would bring in the Related Group of Florida, a separate firm with ties to Related of New York, to provide "boots on the ground" in completing Corus's condo projects.
Lubert-Adler and Florida's Related, headed by "condo king" Jorge Perez, last year formed a $1 billion vulture fund to scoop up distressed multifamily assets in Florida. But Perez faces his own set of challenges as he asks for lenders to rework loans on a number of luxury condo projects that have come to market amid the downturn, the Journal reports.
Tampa Bay readers may remember Florida's Related as the same business that in 2007 expressed interest in taking over the planned downtown Trump Tower Tampa from the original developer, SimDag. The Trump tower, of course, never materialized, which may have been a gift to the area condo market. Sales of high-end condos these days are difficult at best.
-- Robert Trigaux, Times Business Columnist