A plugged-in tipster reports:
Coastal Capital of Sausalito, which bought a portfolio of loans secured by Lembi properties, foreclosed on the properties [yesterday]. Coastal reportedly paid $24.1 million (64% of face value) for the package of loans originated by Tamalpais Bank, and today’s sales at the steps totaled $29,049,100. Pretty nice annualized return! It should be noted that a Coastal affiliate did some of the buying.
Among the foreclosed upon properties sold: 1235 Bay, 2285 Bay, 1125 Broadway, 479 Buena Vista East, 6242 Geary, 315 Hyde, 1651 Larkin, 725 O’farrel, 1701 Turk, and 2350 Van Ness.
Can’t tell the return yet until the affiliate sells the REO…
can someone elaborate on these sales? i show no record of such propeties having sold on the Van Ness steps this week
How do you know the affiliate is going to sell them as REOs? They may have plans of their own that don’t include flipping the buildings immediately.
What is surprising is how Tamalpais was able to loan so much to a single borrower, and also, what was the LTV of those loans. 37 million in loans, @ 80% LTV (going crazy here), where these properties worth more than 45 million at any time?
own that don’t include flipping the buildings immediately
I did not say they were going to flip them immediately, only that you cannot calc the return until they do sell.
By definition they are REO. I have no clue what their holding period expectation is. Not all REO are flipped.
The nature of the affiliate needs to be defined before going back and forth on the REO question really.
i show no record of such propeties having sold on the Van Ness steps this week
While I can’t confirm exact addresses, I will say I saw a boatload of properties on PS yesterday scheduled for auction. Some were listed as Lembi controlled LLCs, and others showed up with either Walt’s or Frank’s name.
Note that the hotels scheduled for auction on March 3 have supposedly (for now) been spared.
But “that date is off,” according to Joseph M. Alioto, hired last week to represent the Lembi family and the Lembi Group company. Alioto said that a restructuring of the loans is being sought and that the lender, New York’s Centerline Capital Group, has agreed to postpone the auction. Centerline could not be reached for comment.
The three Union Square properties are the Hotel Frank, Hotel Vertigo and Hotel Metropolis. They are part of a separate Lembi entity, named Personality Hotels, the brainchild of Yvonne Lembi-Detert, the group’s president and CEO. “We’re experiencing what hundreds of hotels are going through,” Lembi-Detert said. The four other hotels in the group “remain fiscally strong,” she added.
Stick a fork in Tamalpais Bank–they’re done. FDIC fodder on a Friday soon after March 21:
http://www.contrarianpundit.com/?p=7
A few weeks ago someone was asking which properties are (were?!) owned by the Lembi empire. Here’s a list. It’s probably not complete – and it’s just the SF properties. It gives an idea of the size of the empire though. The number of units isn’t shown, but for older apartment buildings the number of units is usually equal to the number of bathrooms. The URL links to a PDF file on box.net that you can download or view in your browser.
http://www.box.net/shared/nrrk5ufdz1
^ Location monopoly FTW.
(Leverage FTL.)
You are leaving out Coastal’s cost of carry – which eats into their overall return. Still-pretty good deal for them overall.