Subdividing Property Leads to Sale at Double Expectations
BVC Partners, Orlando Florida
Challenge
100 acre Ruby Lake property (undeveloped land). No revenue stream. $35 million debt. Failed development which filed Chapter 11.
- Development crashed in the Great Recession and developer lost access to development funding.
- Original lending group agent wanted to sell property for under $20 million but their lenders thought property was worth more than $20 million.
- Developer had granted restrictive land covenants to hotel chain that has purchased some of the original development which restricted use of the remaining 100 acres to prevent condominium development.
- Developer filed Chapter 11 to temporarily maintain control of property.
Solution
- Got relief from stay and foreclosed on property.
- MorrisAnderson managed Chapter 11 for investor lenders and became property manager post Chapter 11.
- Marketed property in two sections; smaller highway adjacent tract for hotel development and larger lake tract for residential development.
- Started marketing process to sell property.
Results
- Negotiated two sale transaction within 18 months.
- Sales netted over $30 million which was approximately double the value the original lending group agent was willing to accept.
