The finance company that loaned Greenvest $130 Million for the 4 parcels of land in Loudoun County was the highest bidder yesterday during an auction of the property. The 4 pieces of undeveloped land had a total of 4,123 acres and each piece was auctioned off separately.
According to reports, iStar Financial initiated the foreclosure proceedings and was willing to pay as much as $91 Million for the land. In the end its total bids added up to $69 Million. With a reported value of $165 Million, this means that no other party, investor or developer, was willing to pay more than 42 cents on the dollar for the land.
Of course, the "reported" value was an overly optimistic value set by someone who had no intention of buying the property. Most likely this was the county's assessed value for tax purposes. The $130 Million loan that Greenvest took out on the property was more than likely based on being able to rezone the land, a plan that was denied by the Loudoun County Supervisors and led directly to the auction.
iStar will now work to find a developer willing to by the parcels and try to recoup some or all of the $69 Million it has invested in the land. But in a hostile environment for developers that includes increased proffers, denied requests to rezone, tightened financing options and an overall weak economy, it will be a difficult sell to say the least.
Hello? We don't need more houses built in Loudoun right now. Let's see the excess inventory drop down so that we can preserve what's left of our dwindling home values. Flooding the market with more homes and commercial sites is ridiculous.
Posted by: G. | August 26, 2009 at 10:24 PM