There is another pending foreclosure near the University of Phoenix Stadium, besides the vacant land owned by the Bidwill family.
A notice of trustee sale was issued recently for the 40,000-square-foot building at 91st Avenue and Coyotes Boulevard. Hat Tip AZCentral.com
The office building was built by Westgate Garden I, LLC, a subsidiary of Ellman Cos. I find a couple of things mentioned in the AZCentral.com article interesting. First, there’s this;
Ellman Cos., according to the statement, is raising capital to purchase distressed and undervalued real-estate assets in Arizona and elsewhere.
If they’re are able to raise capital, why would they let the property go to foreclosures? But then there is this;
Pete Bolton, who heads the Grubb & Ellis real-estate firm in Phoenix, said developers sometimes let a property go into foreclosure with plans to buy back the real estate, now undervalued by the economic downturn, at a lower amount at the trustee sale. Doing so reduces the developer’s monthly loan payments.
So the developer can let the property go to foreclosure, then buy it back at the trustee sale for less then what they owed in the first place. Not a bad deal for the developer but I’m sure the original mortgage holder isn’t so pleased.
This is clearly where corporations have an advantage over individual homeowners. Corporations, buy and develop real estate assets through subsidiary corporations. If the deal goes sour, the subsidiary corporation lets the property go into foreclosure, probably filing bankruptcy in the process. The parent corporation swoops in, probably under the guise of a new subsidiary corporation, and buys the property back for pennies on the dollar at the trustee sale. To bad homeowners can’t do the same type of thing.