Bloomberg has a long write-up on banks increasingly facing defaults on commercial property. Meanwhile, it appears the opening of Meadowlands Xanadu may be pushed back because of a default on a construction loan for the project. Originally Xanadu was supposed to open in 2007. That got pushed back to late 2008 and then again to this summer. Now it won't open by August 2009 and developers aren't saying when it will debut.
Wachovia Corp., now owned by San Francisco-based Wells Fargo, foreclosed on the 46-store Bridgewater Falls mall in Hamilton, Ohio, in February. The borrower, Indianapolis-based Premier Properties USA Inc., defaulted on an $80 million loan from Wachovia at the peak of the real estate bubble. Wachovia sold the property to itself for $33 million, or 59 percent less than the original loan, after no higher bids emerged at an auction earlier this month.
At the Bridgewater Falls complex about 30 miles north of Cincinnati, a Target Corp. store was the first to open about four years ago, followed by companies including J.C. Penney Co., Best Buy Co. and PetSmart Inc., said Julie Krause, the mall's marketing manager. Premier Properties, the site's former owner, filed for bankruptcy last April. Krause said the foreclosure was a reflection of the borrower's struggles, not retail sales.
Susan Stanley, a spokeswoman at Wells Fargo, which has $103 billion of commercial mortgages, more than any U.S. bank, declined to comment on the property or the company's loans.