Residences at Burnham Pointe in jeopardy?
Posted 2/27/2008 by Joseph Askins
Chicago-based Terrapin Properties LLC may be in danger of dissolution following a foreclosure suit against one of the company's Kenosha, Wisc., developments, the Sun-Times reports.
That could be bad news for one of Terrapin's biggest local projects, The Residences at Burnham Pointe. The 28-story, 298-home high-rise under construction at 720 S Clark St is 55 percent sold, according to the Sun-Times. A Burnham Pointe sales manager told me last month that the building would be ready for first deliveries this spring.
So what's going to happen to these condos?
Sources said (Terrapin principal Jay) Geleerd begged for time Friday on a conference call with a large number of creditors. They said Geleerd asserted he was close to selling the Burnham Pointe condo inventory to somebody whose cash would prop up the company.
"The atmosphere was pretty intense," one person said. "And nobody believes that in this market, there's an investor looking for condos."
Terrapin's inventory also includes homes at the Grand Plaza condo conversion at 545 N Dearborn Ave and new construction units at 901 W Madison St.
Comments
2/27/08
Danny said:
When developers projects are foreclosed, does the bank sell the remaining units off like any other foreclosed property? This isn't really related to the Terrapin issue, but I'm wondering what the risks are if you buy a unit in a building that has no condo association. I've seen some bargain-priced condos lately in small 3-flats that have no association in place…usually some of the windows in the building are boarded up and it looks like the developer didn't finish the project. Is this a great buying opportunity for someone who wants cheap raw space they can customize? Or is it just a nightmare because all of the building's problems (leaky roof/pipes, bad wiring, etc.) become your problems (and yours alone)?
Joe Zekas said:
Danny,
At a project the size of Terrapin's you're likely to see an orderly process.
The likelihood is that the bank contracts with a developer to complete and sell the remaining units or sells the units in bulk to a developer. Either way the association is formed in due course, etc. and the unit owners experience little, if any, disruption.
Smaller developments that have gone into foreclosure can devolve into nightmarish scenarios. Unless you're a very sophisticated investor you're best off staying away.
The likelihood of buying cheap raw space in either a smaller or larger deal is extremely low.
3/16/08
Greg said:
I came across this article while doing some Google research about Burnham Pointe. How does this news bode for those of us who would otherwise be interested? Is this a red flag to steer clear until better financial news about Terrapin shows up, or is it maybe a green light to go in with an offer that is far below market value?