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CMBS Delinquencies Hit All-Time High

Trepp data

Within the past week, Trepp reported that the delinquency rate for U.S. commercial real estate loans in CMBS hit 9.88%, an all-time high.  Furthermore, the delinquency rate continues to increases.  As compared to a year ago, the overall U.S. rate of delinquency was 8.71%.

A year ago, the rate of seriously delinquent loans (60+ days delinquent, in foreclosure, REO or non-performing balloons) was at 7.95%.

As of July 2011, the rate for seriously delinquent loans stands at 9.14%

See the accompanying chart for asset class specifics as reported by Trepp.

Interesting to see that Lodging is actually improving while Multifamily is supposedly is not.  Doesn't necessarily match up with all media reports these days about the strength of Multifamily.

"We have seen an increase in the number of filings on commercial and non-residential properties in the past 12 months, so the data from Trepp does not seem out of line.  Additionally, there seems to be a lot more attention on working out these delinquencies than ending up at a foreclosure auction," said Bardan Azari, Cherry Picker Investments.

 

Michael Hobbs  August 10, 2011

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Let's Play Monopoly! You Buy The Wyndham Hotel O'Hare

wyndham

It's Monopoly time again...haven't played Monopoly in some time?  Possibly this month is your time to get back into the game playing mode. This month, instead of buying Park Place or Boardwalk, you might consider buying the Wyndham  O'Hare at 6810 Mannheim Rd in Rosemont, Illinois.  Per Cherry Picker Investments, the auction for the distressed hotel was previously scheduled at the beginning of the month and has been moved to August 25, 2011.  From what the sources indicate, this is an asset not-without major problems....so it may be more akin to playing cowboys and indians in the wild west than playing a more risk-assured game of Monopoly.

Granted, the types of competitors for an asset of that size are quite different than the competitors for a residential or small commercial property.  Nonethless, distressed hotel real estate assets bring out interested parties and this one is going to be interesting.  Given that this is not the first Chicago hotel to go fall into the distressed category, it is assumed that anyone who may have wanted this asset would have bought it well before the pipes froze and burst.

Ultimately, the distressed asset has a delinquent balance of $16,053,104 per foreclosure filing 10CH1028.

 

Michael Hobbs August 9, 2011

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Another Illinois Bank Fails....More Distressed Real Estate

bank of shorewood

News Flash

Bank of Shorewood, located in Illinois, failed on Friday.  The failure was the 6th in Chicago in 2011 and the 32nd to fail since 2009.  The Federal Deposit Insurance Corporation (FDIC) estimates that the loss will be approximately $26mm.

Another bank failure equates to more distressed assets.  Whether via foreclosure or deed-in-lieu of foreclosure or other mediation with the lender, only time will tell what the extent of the impact will be.

Pull out those vinyl LPs...Another One Bites The Dust

Michael Hobbs August 8, 2011

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Let's Play Monopoly! You Buy The Westin Hotel O'Hare

westin ohare

For those individuals who do not regularly play Monopoly or have not played in quite some time, possibly now is the time to get back into the game playing mode. Instead of buying Park Place or Boardwalk, you might have considered buying Westin O'Hare.  Per Cherry Picker Investments, the hotel was previously acquired in 2007 for approximately $125,000,000, of which $101,000,000 was the amount of the mortgage, and went to auction this week.

Granted, the types of competitors for an asset of that size are quite different than the competitors for a residential or small commercial property.  Nonethless, distressed real estate assets bring out interested parties and this one was no different.

Ultimately, the distressed asset sold for $53,000,000 to an industry player, Chartres Lodging.

 

 

Michael Hobbs August 5, 2011

 

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Buy Your Own Bucktown HighRise

1600 milwaukee

If you have ever driven through the intersection of Damen Avenue, North Avenue and Milwaukee Avenue, the Bucktown 6 corners intersection, you have no doubt seen the 'highrise' in Bucktown.  1600 N. Milwaukee as the address is typically referred to as is a 12 story historic property with wonderful, sweeping views of the city from the upper floors. The Art Deco building was constructed in 1929 and has been a staple in the Bucktown landscape.  Previously occupied by a Midwest Bank branch on the first floor, the building is now home to a Spring cellular store.

And, in an environment that can only be called unexpected, another venerable property has experienced a foreclosure filing.  In February 2010, the plaintiff, Amcore Bank, filed a legal action noticing foreclosure, per Cherry Picker Investments.  1600 N. Milwaukee, alternately referenced as 1608 N. Milwaukee by the public records, with PIN 14-31-333-024 according to an old MLS Listing from 2007, and indicated as 14-31-333-034-0001 thru -0012 by Cook County Assessor, is zoned B3-2.  The legal filing noted that the delinquent loan was originally taken out in 2007 for $4,460,524 and was last paid in 2009.

As noted in a recent Crain's article, Don Wilson, head of trading firm DRW Holdings LLC and AJ capital partners recently bought the note on this property by negotiating with two banks involved with two separate mortgages.  Granted, that is not the same route as buying a property at the Cook County foreclosure auctions, but nonetheless, it can be a very effective strategy to quickly gain some control over a property.

“It's the trophy property in Bucktown that was at one time zoned for a boutique hotel,” says Keith Lord, president of Chicago-based Lord Financial Advisors LLC, whose debt-sale business sold the notes to the new venture.

Only time will tell how Krzysztof Karbowski, unsuccessful developer of the tower, and principle in Time Properties Inc. and MCM Properties, will handle this situation.  Then again, this is an environment that can only be called unexpected and just about anything might be possible.

Michael Hobbs August 4, 2011

 

 

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Wrigleyville Condo: Buy One Get One Free?

3505 seminary

Later this month, Cherry Picker Investment clients may get the opportunity to bid on a delinquent condominium project in close proximity to Wrigley Field, home of the Chicago Cubs.  From the public information available, it seems that a former construction loan for a new 3 unit building didn't go so well and now 2 of the units appear to be heading to foreclosure auction under one foreclosure action.  09CH43623 is the chancery file number for 3505 N. Seminary. 

Who knows, it could actually be a buy one get one free day on August 18, 2011 for some lucky Wrigleyville residents or want to be real estate investors who live in Wrigleyville.  Let the foreclosure investing begin anew.

Happy bidding!

Michael Hobbs

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Chicago Foreclosure Investment Highlights For July 25 - 29, 2011

foreclosure house

Just because people take vacation in July, does not mean there are not some tantalizing real estate investment opportunities in the metro Chicago and suburban areas.  For the final week of July 2011, July 25 - 29,  Cherry Picker Investments saw some notable properties acquired at the foreclosure auctions.

Cherry Picker Investments has a proprietary database which identifies all distressed properties in the metro Chicago areas, including Cook County, Lake County, Dupage County, Kendall County, Kane County, McHenry County and Will County.  Specifically, because these properties are distressed (notice of foreclosure has been filed), most of them eventually end up at a foreclosure auction.  At the auction, Cherry Picker Investment clients, who are real estate investors, can bid on the properties and take advantage of potentially lucrative investment opportunities.

If these properties had not been purchased at the foreclosure auctions, then the properties would have gone back to the bank / lender and become bank-owned properties.  These properties are not short-sales.  Once the property is returned to the bank / lender, then the property typically gets listed by the bank's preferred Realtors as an REO / Bank-owned MLS listing.

For those real estate investors who are ready, willing and able to strike while the opportunities are strong, foreclosure buying is an excellent strategy to employ along side working with a talented Realtor for properties available on the MLS, reviewing short sale opportunities, analyzing estate sales and bank-owned real estate.  Given the challenging nature of real estate investing, the challenge of finding good investment opportunities, and the cumbersome and meticulous process of sorting through so much public, and private information, for foreclosure filings, Cherry Picker Investments provides the competitive edge that investors need to be successful in foreclosure buying and investing.

Foreclosure Investing Success in Illinois for July 25 through July 29 2011:

4247 Ridge, Arlington Hts
447 Old Walnut, Gurnee
6540 W. Irving Park Rd #606
456 Willowbrook, Geneva
28 S. Park, Addison
5000 Carriage Way, Rolling Meadows
2215 Candlewood, Plainfield
3733 Crescent, Steger
1119 32nd, Bellwood
2050 Valley, Lombard
524 Parkview, Buffalo Grove
706 Marilyn #109, Glendale Hts
1425 Marshview, West Chicago
6454 N Mozart #2, Chicago
1051 Noelle Bend, Lake In the Hills
1424 Spyglass, Itasca
4427 S. Honore

Happy Investing,

Michael Hobbs August 9, 2011

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Chicago Cubs Fan: You Could Own A Wrigley Field Rooftop

Chicago Cubs Rooftop

The Lakeview Baseball Club is going to auction, foreclosure auction that is, on August, 17, 2011.

The building is best known to Chicago Cubs Fans as the three-story building overlooking Wrigley's right field that displays two signs written in Latin.   Anguished Cubs fans know the respective meanings: 1) says “Eamus Catuli,” which means “Let's go little bears,” and 2) reads: “AC0266102.” The letters AC stand for "Anno Catuli," Latin for "Year of the little bear" and the numbers represent the number of years since the franchise last won a division title (02), a National League championship (66) and a World Series (102).

First Personal provided the $2.8-million senior loan in March 2006 and the $350,000 junior loan in April 2007 and three other creditors are owed $715,334, according to the foreclosure judgment entered July 8 in Cook County Circuit Court.

Needless to say, as goes the Chicago Cubs, so goes the Wrigleyville Rooftops. The Chicago Cubs are 43 - 65 win loss record and 16.5 games out of first place in the Central Division in the National League, per ESPN.com

By the associative principle, given the 40% win rate of the Chicago Cubs, one might say that the rooftop could be had for 40% of the total debt or $1.55 million....now, at that price, somebody might bid and win.  Granted, at that price, one of the creditors might also bid and win!

No matter what happens, there are losers and there are the Chicago Cubs.  Only this time, First Personal Bank gets to join the ranks of the Chicago Cubs, but at least the Cubs have the Rickett's family backing them up....not so sure about First Personal Bank, of Orland Park, Illinois.

Michael Hobbs  August 1, 2011

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