Tuesday, March 23, 2010

Berkeley Faces Foreclosure on FP Properties

UPDATE: In the Banker & Tradesman, Park says rumors of his demise are premature:

Developer Denies Fort Point Foreclosure Threat
By Paul McMorrow
Banker & Tradesman Staff Writer
Berkeley Investments principal Young Park is denying reports that he is close to losing much of his Fort Point office portfolio, saying talk of a foreclosure at the former Boston Wharf Co. warehouses is a negotiating tactic by lender Wells Fargo.

"We are in negotiations with them," Park said. "The story is, it's a maturity default, we're cooperating with the lender to find a solution, and a solution will be found one way or another. These properties are cash-flowing. We've never missed a payment. There's no distress of any kind."

Berkeley will negotiate a loan extension, find replacement debt for the maturing loan or buy back its own note from Wells Fargo, Park said.

"We certainly have the financial capacity to do one of those three things," he said. "This is not great publicity, but it is what it is, and we need to deal with it. There's no way we're going to walk away."

Fort Pointless
Foreclosures a setback for neighborhood
By Donna Goodison | Tuesday, March 23, 2010 | http://www.bostonherald.com | Real Estate

Berkeley Investments is staring down a foreclosure auction for nine of its Fort Point Channel properties in Boston’s Seaport District, including office buildings at 368 and 381 Congress St.

Wells Fargo Bank set a May 5 sale of the parcels after Berkeley defaulted on a mortgage, according to a legal notice announcing the auction. The sale is yet another potential setback for Seaport development that’s been stalled by financing constraints.

The properties constitute a large portion of the 700,000 square feet portfolio of a dozen buildings, parking garages and lots that Berkeley bought for $97 million from Boston Wharf Co. in 2004.

Its goal was to turn Fort Point Channel into a more active neighborhood.

Berkeley president Young Park said his company is in negotiations to avoid the foreclosure sale.

“We’re working through it,” he said yesterday. “The note reached its maturity date . . . and the bank doesn’t want to renew the loan.”

The real estate investment and development company previously sold five of its former Boston Wharf properties, totaling 335,000 square feet, to Newton’s National Development.

Parcels headed for the auction block also include 22 Boston Wharf Road, an eight-story building with six levels of parking and 58,000 square feet of office space; and 12 Farnsworth, a six-story building with ground-floor retail.

Park is a “visionary” who understood Fort Point Channel’s potential to be a unique neighborhood by converting its warehouses for 21st-century uses, said Vivien Li, executive director of the Boston Harbor Association. He lured two of the city’s top chefs: Barbara Lynch, who opened Sportello, Drink and Menton on Congress Street; and Joanne Chang, whose Flour Bakery is at 12 Farnsworth.

“It would be a major setback for this district if for some reason he was not able to hold onto these properties,” Li said. “But the real estate market is very tough right now, and financial institutions are really scrutinizing every loan. They are not lending money, which is what put a halt to all the development on the waterfront.”

Berkeley’s Fort Point Channel parcels might not be its only properties in trouble.

The Worcester Telegram & Gazette this month reported that a March 31 foreclosure auction had been set for three downtown Worcester properties that are part of Berkeley’s stalled $563 million, 20-acre CitySquare development plans. The newspaper said it erroneously printed a legal notice for the auction that the mortgage holder had pulled. Last week, however, Hanover Insurance Group’s Opus Investment Management signed a purchase and sale agreement with Berkeley to become the project’s new developer. Berkeley, meanwhile, will retain ownership of the three buildings in question, the newspaper said.

Article URL: http://www.bostonherald.com/business/real_estate/view.bg?articleid=1241704

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.