Additional details from J.K. Dineen on what’s driving the sale of the seven proposed Renzo Piano parcels (not to mention a few other properties):
California Mortgage and Realty President David Choo is selling off nine properties, including two downtown development sites, in a bid to save his struggling private mortgage company.
In a July 23 Securities Exchange Commission filing, CMR details “cash flow problems” stemming from the fact that 84 percent of the private lender’s borrowers in its second fund are delinquent on payments. In the filing, Choo said $5 million of the profits generated from the real estate sales would pay CMR’s debts and obligations; another $1.5 million would be set aside for the company’s overhead and operating costs.
The properties listed for sale include an office tower development site at 524 Howard St.; a two-family building in Pacific Heights; a condo at the St. Regis; houses in Piedmont and St. Helena; a condo in New York; and the seven-parcel assemblage at First and Mission where Choo and development partner Solit Interests Group had sought approvals to build six razor-thin 1,000-plus-foot towers designed by celebrity architect Renzo Piano. The First and Mission property was recently assessed at $140 million. CMR CEO James Gala said that three properties, one in the South Bay, one in Las Vegas, and one in San Francisco, are in contract to be sold. The loan balance owed on these properties is not known.
Keep in mind that over half of the delinquent loans CMR is working out “come from one development: a $98 million bridge loan funded by CMR and Canyon Capital Realty Advisors after figuring out some bridging loan rates for the 2,000-unit Royal Kunia housing development in Hawaii that was current at the end of last year, but has now moved into the delinquent category.”
84% are delinquent? Now you’re scaring even me.
[Editor’s Note: From a paragraph that got dropped: “More than half of the delinquent loans CMR is working out come from one development: a $98 million bridge loan funded by CMR and Canyon Capital Realty Advisors for the 2,000-unit Royal Kunia housing development in Hawaii that was current at the end of last year, but has now moved into the delinquent category.”]
This means waiting might result in a better deal, right?
84%?? Choo’s credit officer should have been fired a long time ago!
A friendly note from the Business Times: “We “unlocked” the Choo story so SocketSite readers should be able to get the whole thing now.”
This guy is hardcore. He’s selling his house, vacation houses, condos in Vegas, whatever, to shore up his company in hard times. Most people would just run and hide.
As Ali G would say: “Respek.”
LOL.
Fluj, where are you?
We need some encouragement here……
Not sure about the math on the delinquent loans. CMR also “services” $44 million in loans to the Dyer Mountain ski project in the Northern Sierras. The loans are by CMR funds (CMR I, CMR II, etc.). The project is in a bankruptcy case pending in San Francisco (Case No. 08-30499) which as filed in later March on the eve of foreclosure. According to court records, the borrower never paid any interest on the loans which were funded several years ago. From the bankruptcy court filings its not possible to tell what portion of the $44 million is owned by CMR and what portion is held by investors. My point is simply that I don’t know that the problem is just one project gone bad.
Is this the same H. David Choo who a few years ago made the “The Bay Area’s 45 Worst Slumlords” List http://www.indybay.org/newsitems/2000/09/01/17492.php and the “Oakland Dirty Dozen Landlord” list. http://www.idelafuente.com/1999-10.htm If so I wouldn’t feel so sorry for him.