Once-hot condos get 1 bid

Project is sold at auction to the foreclosing lender

May 05, 2007|By Jamie Smith Hopkins | Jamie Smith Hopkins,Sun reporter

The auctioning of a large condo conversion project in Baltimore County drew a crowd of gawkers yesterday but only one bid - from the foreclosing lender.

The 508-unit Rodgers Forge Condominiums, an apartment complex near Towson, was in the midst of being renovated and sold as condos. It is one of at least three local projects owned by Triton Real Estate Partners that have been or are scheduled to be auctioned.

Twelve already sold condo units at the Rodgers Forge complex were not included in the auction. But several dozen condos under contract were.

What will happen to those units and the rest of the complex is unclear. An attorney for the purchaser, CBRE Realty Finance, said the company had no comment.

The CBRE Realty's successful bid was just $1 million. But as the third-mortgage holder, it must assume the debt of the first two loans - $36.5 million.

Auctioneer Daniel Billig, standing on the steps of one of the renovated Colonial-style buildings, practically pleaded for more bids.

"You can give me one-million-500-thousand," Billig said through a loudspeaker. "You won't insult me."

The event attracted more than 50 people, almost all onlookers interested to see what would happen to the 26-acre property, an island of affordability tucked between upscale subdivisions. Folks from nearby Towson dropped by, while real estate professionals stood with their heads together, murmuring.

Matter of debt?

Billig, of A.J. Billig & Co. Auctioneers, said several people registered to bid. He speculated that they had misunderstood how much debt they'd have to take on and were put off by the amount when he reiterated the terms.

Baltimore economist Anirban Basu considers the sparse bidding a sign of how little confidence developers have in the market - and how much things have changed since the end of the housing boom in late 2005. Before that, "investors were just chomping at the bit for opportunities," he said.

Home sales slowed significantly after Triton got its loan from CBRE Realty in October 2005.

Sales of existing homes in the metropolitan region were down more than 20 percent in March versus the comparable month two years earlier, during the boom.

New-home builders have also felt the pinch.

Particularly weak

Condo developments are a particularly weak part of the market now, Basu said.

"When this project was conceived, it's very unlikely that they saw the subprime market shutdown coming," said Basu, referring to the tightening in lending to buyers with less-than-perfect credit that has followed an increase in foreclosures. "When you take those kinds of buyers out of the pipeline - well, this is the type of buyer that likely would have bought a home at a place like this Rodgers Forge loca- tion."

Starting in $200,000s

The condos, which ranged from one to three bedrooms, started in the low $200,000 range.

Triton Real Estate, headed by developer Brian McCormick, did not return phone calls seeking comment. The Annapolis company had assured residents that it would refinance the Rodgers Forge property and wouldn't let it go to auction, a position it gave in an interview with The Sun last month.

Another Triton project - the Landing at Spa Creek, a waterfront condo conversion project in Annapolis - was also bought by one of its lenders at auction this week, though in that case the lender was not the only bidder. Triton's Monterey condo conversion in Rockville is scheduled for auction Wednesday.

For Triton, the projects came with hefty financial obligations. Including the third mortgage, the debt on the Rodgers Forge complex alone is about $60 million. A variety of contractors have sued Triton for unpaid bills.

`Too many units'

"I just think that [McCormick] had too many units that he was focusing on at one time, ... and then the market slowed," said Anthony J. Corteal Jr., a senior vice president at STV Inc., a development services firm that worked with Triton on Rodgers Forge and three other projects. Corteal stood in the crowd yesterday, wanting to see who would buy the property.

"If the market hadn't turned, this would have been a hit," he added. "These units are so affordable."

Tim Dobson, 52, whose family rents an apartment there, said the uncertainty about what will happen "is a little disconcerting." Dobson, whose lease is up in January, is hoping the foreclosure and auction will work out to the remaining renters' advantage and allow them to continue living at the complex longer than they otherwise could have.

His rent is $690 a month for a one-bedroom, low for the area. The apartments are without central air conditioning and in-unit washer and dryers. But he loves the place because he can work part time and afford to stay at home during the week to care for his 7 1/2 -month-old son while his wife works.

Standing near the remnants of the auction crowd with his baby in a stroller, Dobson mused about the conversion plans, and about how hindsight is always 20-20. A sign at the complex promised that a pool and clubhouse were "Coming Soon!" - but everything is up in the air now, he said. "I feel sorry for the guys that bought the condos," he said.


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