Commercial Foreclosures and Bank Repossessions in Marin

Posted on June 17, 2009
Filed Under Foreclosure Homes | Leave a Comment

Commercial foreclosures for sale and bank repossessions are making its presence felt in Marin County. In the first week of June one of the biggest commercial properties in Marin was put up for auction on the steps of San Rafael City Hall. But there were no bidders.

The property in focus is the Marin Commons Office Complex located in San Rafael. It covers an area of 455,000 sq. ft.

After failing at the auction the commercial unit was repossessed by the lenders – Connecticut General Life Insurance Co following the failure of Hines Interests Ltd. (private international realtors) of Houston to repay loans taken in February. Hines had taken a mortgage loan of $56.3 million keeping the property as collateral. Another $8.5 million construction loan had also been taken. At the time of foreclosure the lender was due $59.1 million on the mortgage loan and $3.28 million on the construction one.

A spokesperson of Hines, Paul Paragis said, “The severe downturn in the economy made it impossible for us to meet our leasing projections. So the property was not generating enough revenue to make the interest payments.”

The broker who marketed the estate, Haden Ongaro commented, “Certainly it’s a major occurrence. We don’t usually see properties go back to lenders in the North Bay. It is unusual. We’re in unusual times.” He explained the rents on commercial units had started to fall while at the same time a new complex with office spaces (240,000) was supposed to ready by the end of this year. This has caused the borrowers to face extreme difficulties with the rent collection dipping and in some cases office space lying vacant.

No representative of Connecticut General was available for comment and its plans on the complex remain unknown. Paragis gave out the hint that Hines would most probably continue to manage on behalf of Connecticut General. He elaborated that discussions were going on and there was a good chance that continuity in management would not be broken.

Hines took over Marin Commons when it was known as Marin Technology Center in 2005 July. He bought it from AMG Realty Partners. At the time of purchase half the complex was vacant. Hines knew that Lucasfilm would pull out most of its operations from here and relocate elsewhere. Hines at the time of purchase had tentative plans of building housing units. But before plans could take off the housing market decline had set in.

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