Friday, February 19, 2010

Beverly Hills Development Watch: Developers of 9900 Wilshire Surrender 8-Acre, $500 Million Site to Bank

We hear so much about foreclosures, short sales and "cash for keys" that it almost seems common course that banks repo real estate for which owners are in default. But we forget that sometimes these distressed properties have some very big price tags.

Like $500 million, for example.

Today, the posh British development team Candy & Candy and Iceland’s Kaupthing Bank will hand back ownership of 9900 Wilshire Blvd in Beverly Hills to a bank controlled by Mexican billionaire Carlos Slim. The developers had defaulted on their $365.5 million loan, which had been one of the largest transactions in Los Angeles County.

This 8-acre site, formerly home to the Robinsons-May Department store, was to be home to 235 super-luxury condominums designed by Richard Meier. Candy & Candy had successfully promoted similar developments, such as One Hyde Park in Central London.

But times change, and the project never got past the drawing board. We believe even more money could have been lost if the project saw the light of day and its multi-million dollar condos were languishing on the market. And whoever the new owner is will have a lower cost-basis and the ability to set prices at realistic levels.

There were signs that the $500 million price tag was perhaps a tad inflated: the property sold for $33.5 million only three years earlier.

[Beverly Hills Gets Waldorf Astoria, Luxury Condos, and Bump in Traffic]