Real Estate Investment :Atlanta’s Streets of Buckhead Another Stalled Project
Article Summary:
Bank of America is on the hook for a 0 million dollar loan on the project that is dead in the water.
Article Content:
One of the outgrowths of the commercial real estate slowdown is the preponderance of stalled projects. One that I drive by on occasion is the Streets of Buckhead in Atlanta.
Bank of America is on the hook for a 0 million dollar loan on the project that is dead in the water. The bank will have to decide whether to take a complete loss on the project as the development is tapped out, or double down and lend enough to finish it.
A tough choice in a tough market. But there are other projects around the country such as “Filene’s Basement site in downtown Boston; CityNorth, the mixed-use project that Related Cos. and Thomas Klutznick Co. were building in Phoenix; and the Xanadu retail project in the New Jersey Meadowlands.”
All of these mega projects are stuck since demand is not there and financing to complete the projects can not be found.
Lots of small businesses were bought out in some of the most fashionable real estate in the toney Buckhead hamlet outside of Atlanta. The land now is just a desolate landscape, hurting both the local businesses that stayed and the tax base for the city.
The Streets of Buckhead, was started in 2007 with a 0 million loan from Bank of America. Veteran developer and native Atlantan Ben Carter originally envisioned some 500,000 square feet of stylish restaurants and stores, a 225-room hotel and 350 condominiums. Marketing materials tout “a southern address for European style.”
Today, Streets of Buckhead is one of many high-profile developments in the country halted by the economic downturn and financing drought. Real-estate developments are among the biggest headaches for banks because they are huge capital drains and, in most instances, demand for space and rents in their markets are falling below projections. As of the fourth quarter, about 20% of 0 billion of construction loans outstanding were more than 30 days past due, according to Foresight Analytics, compared to 11.4 % a year ago. via WSJ.com
Personally this does hit home. The first place I worked at in Atlanta was scraped down for this project. I do not mind it when the project is completed, that is progress. It is the destruction and then failure of the project that disturbs me, because that is hubris.
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Atlanta’s Streets of Buckhead Another Stalled Project
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