posted on November 04, 2010 20:49
Two Central Texas projects belonging to real estate companies affiliated with developer St. Croix Capital Corp. have been posted for foreclosure and are scheduled for auction Tuesday.
The 264,755-square-foot Centerpoint at Colorado Crossing in Southeast Austin at 7000 Burleson Road is scheduled to go to auction this morning, according Real Estate Foreclosures and Foreclosure Listing Service, both companies that track foreclosure listings.
Bank of America posted the property for foreclosure after the owner declined to put up more money when the bank sought to rebalance a $17.7 million loan that the owner, Centerpoint Crossing Austin LP, took out in June 2008. According to the Travis County Appraisal District, the property’s assessed value was about $10 million in 2010, having decreased in value from $11.5 million in 2009, which is rare as appraisal values usually only increase. The property has been toured numerous times in recent months, according to real estate sources, and is featured on the Austin Chamber of Commerce’s website as a prime location for leasing.
Meanwhile, both foreclosure listing services show that a 16-acre patch of land in Round Rock at Old Settlers Boulevard and Mesa Park has posted foreclosure. The land, zoned for commercial and medical use, is owned by Kelly Trade Ventures, the company that St. Croix created to handle the firm’s real estate development. American Bank of Texas is trying to collect on a $2.4 million loan that Kelly Trade took out in October 2008, according to Foreclosure Listing Service. Williamson County listed its assessed value at $2.7 million, slightly more than the loan amount.
St. Croix President Ken Satterlee couldn’t be reached for comment, but Kelly Trade Ventures 4, the general partner of Colorado Crossing, sent a statement responding to the foreclosure postings late Monday.
“It is an unfortunate reality that in today’s current commercial real estate climate that well-built, well-located and well-capitalized projects such as Centerpoint can face foreclosure proceedings,” the statement read. “An egregiously inaccurate appraisal, commissioned at the depth of last year’s recession, prompted the bank to demand a rebalance of the loan. While that loan had sufficient funds remaining, the two parties were unable to come to agreeable terms.”
The statement continued, “Kelly Trade Ventures’ due diligence determined both properties are worth more than their outstanding debt. It looks to continue to enhance the value of its remaining assets in Austin’s southeast industrial market, totaling nearly 500,000 square feet, as the market continues to improve.”
Kelly Trade Ventures is an affiliate of Kelly Capital, which was formed to act as the owner of land developed by St. Croix, according to St. Croix's website.
St. Croix and its affiliated entities have at least 10 projects around Central Texas listed on its website. It recently got a boost when Goodwill Industries of Central Texas signed a lease for a 124,200-square-foot building at its Kelly Trade Center II, a single building at 6505 Burleson Road not far from Colorado Crossing.
“The Southeast submarket is leading the charge out of the doldrums,” Ken Satterlee said of the deal. St. Croix bought the Kelly Trade Center property in mid-2007. At the time, the building, built in 1998, was fully occupied with a tenant that eventually moved out, leaving a prime block of large space available until Goodwill came along.
Besides Goodwill, other significant industrial leases signed this year include Ultra Electronics Advanced Tactical Systems Inc. and US Courier & Logistics, which both leased 76,800 square feet at Burleson Business Park. Western Paper leased 37,000 square feet and Move Solutions leased 24,000 square feet in the same submarket. New construction projects are also in the works for the Southeast region, including the Veterans Administration’s new 185,000-square-foot clinic, Data Foundry’s 250,000-square-foot data center and Ben E. Keith’s 85,000-square-foot distribution center.
“I think that there is hope for [Colorado Crossing] because that submarket has seen a lot of positive news,” said M’Lou Patton Bell, a real estate lawyer with Munsch Hardt Kopf & Harr in Austin. “What we are seeing here with these foreclosure postings is the tough situation real estate owners are facing with taxes going up on land and values going down in the last few years with the recession.”
11/2/10, Austin Business Journal, Francisco Vara-Orta