Barry Real Estate’s financial woes continue
Posted by AWB in City & County Government, Fort WayneWhen all else fails, blame someone else.
Hal Barry of Barry Real Estate was at a hearing before a panel overseeing the Troubled Asset Relief Program (TARP) held today at Georgia Tech. Mr. Barry had this to say about the banks.
“Finding a lender to finance these buildings has been a real joke,” Barry said.
[...]
“The recession hit us hard,” Barry said.
Atlanta developers and attorneys shared similar stories with the oversight committee of a banking reluctance to finance new developments or refinance existing deals with reasonable workouts, given the realities of metro Atlanta’s distressed market.
The fact is, the banks are right to hold back. Yesterday, Forbes’ Investopedia had this item:
Bad Commercial Real Estate Loans Now Coming Home to Roost
The numbers are pretty alarming. This year, about 36% of the $270 billion in commercial real estate loans maturing this year are underwater – a situation where the mortgage balance exceeds the value of the underlying property. And things will get worse before they get better. By 2011, 49% of the maturing loans will be underwater, rising to 63% in 2012 and 61% in 2013, before cresting at 57% in 2014.Between 2010 and 2014, a whopping $770 billion in maturing commercial real estate loans are expected to be underwater. The situation is so grim that even long-time players in the commercial real estate game are predicting that we are facing something akin to a “lost decade” for the U.S. commercial real estate market.
Things have been going so swimmingly well for Barry Real Estate that Lance Patterson, Barry Real Estate’s president and chief operating officer quit back in July. Patterson came from First Fidelity Mortgage Corp in 2005 where he held the role of chief operating officer. In his four short years at Barry Real Estate Patterson was instrumental in bringing in over $1 billion in debt for Barry’s projects.
Back in 2001 the FDIC was issuing warnings to local banks they were vulnerable to downturn in the real estate market. Lance trudged on.
“I don’t think there’s any danger that vacancies are going up or that we’re going to have some problem loans,” said Lance Patterson, chief operating officer of The First Fidelity Mortgage Corp. “We’ve had a fairly decent and consistent amount of building over the past five or so years. It’s fluctuated a little bit, but our take on it is that’s its in equilibrium right now.”
He noted that Atlanta was experiencing a near record level for leasing and net absorption of properties. In addition, over the past several years it has been difficult for builders to obtain money for new buildings.
“It doesn’t mean that people won’t in some cases find money to do their deal, but it sure puts a big lid on it,” Patterson said.”
A few years later Lance was at Barry Real Estate borrowing money like there was no tomorrow.
Poor planning on Barry’s part does not constitute an emergency for others.
Why haven’t we bailed yet?
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$5,000 a day, I think, is the amount owed by Barry to the City in liquidated damages. Proably time to all that in. However, Mr. Leatherman is reluctant to pursue the penalty because he would rather have the building constructed and is hoping against hope. Lost decade, eh. I would guess that the space along Jefferson should be redeveloped as a nice green space to gain some use over the next few years. .
This is distressing and depressing for me. As one of those "pain in the ass" taxpayers who politely raised the hands and politley asked questions about this project, I was told that I didn't have the "vision". I was told that I was an impediment to progress. I was told that I didn't have the intellect to "understand" progress. When I button-holed my Councilman at a downtown affair, I asked how were we going to pay for all this "vision". "Are you with the media", he asked. "No, I said". He responded: "then I don't have to talk to you".
When the Calhoun Street debacle came to light, I was told that "it was a done deal" by a person in the mayor's office. I was told, once again, to sit down and shut up. 4 City Council members lied about their positions, then voted the way they were told to.
Now, with the RenSqr affair, no one is listening. Oh, they're having meetings…..but is anyone on that committee a regular taxpayer who has no affiliation or allegiance to those wanting this project. No. I get to sit on the sidelines and watch my good money being thrown after bad.
And what's most disturbing is that the people making these decisions are not elected, so I can't vote the bastards out. I'm screwed, and I'm not liking it one damn bit. But, as usual, no one is listening, and no one cares. But they are spending my money.