Land partnerships hit by lousy housing market, low land values, credit crunch

The Saint ReportProperty Development, saintblog0 Comments

Plummeting values on large tracts of land are targeting partnerships that were once a common way to own and develop land in boom times, especially when demand for new homes has also shrunken.

Michael Corkery’s recent story in the Wall Street Journal about LandSource Communities Development LLC sets out the challenges facing one such partnership, which owns 15,000 acres in South California, that has received a default notice on a $1 billion loan.

Not too long ago, partnerships attracted hundreds of lenders to syndicated debt, promising high returns to investors while developers could keep highly leveraged land off their books. Could none of this have been foreseen?

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