Condo units have been filling lists of Atlanta foreclosed homes for sale as more and more condo buildings fall into default and foreclosure.
Among these failed condo projects were those financed by Corus Bank, an institution based in Chicago which was closed by regulators in September last year because of its heavy exposure to distressed real estate development loans in large condo markets.
One of these distressed Corus-financed condo complexes is the 20-story Mezzo apartment building in south Buckhead, an upscale district in metro Atlanta. The condo tower, which was converted into an apartment complex during its construction, has been scheduled for foreclosure sale in April. The developer, Tivoli Properties, took out its development loan from Corus Bank.
The Mezzo tower, however, can escape the scheduled auction if Tivoli CEO and president Scott Leventhall is able to negotiate for a better outcome with the partnership forged by private investors with the Federal Deposit Insurance Corporation.
Corus Bank was downed by failed condo complexes in Atlanta and in formerly hot condo markets in California and Florida. At its peak, it was financing 10 real estate projects in Atlanta worth over $600 million. Its condo financing at one time involved over 2,000 condo units, making Atlanta its third biggest market.
The foreclosures carried out by Corus Bank in 2008 and 2009 contributed substantially to the surge in Atlanta foreclosed homes for sale over the past two years.
In 2008, the bank foreclosed on the 282-unit condo complex called Horizon at Wildwood in Marietta after developer Wood Partners failed to pay its $50 million loan. The subsequent auction of foreclosed condo units sent a downward price impact on condo prices in the city.
In early 2009, it was the 193-unit condo conversion The Brookhaven that was foreclosed by Corus, putting further downward pressures on condo prices.
A consortium of investment firms headed by Starwood Capital prevented condo prices from getting thrown into a free fall. This consortium teamed up with the FDIC to look into the Corus real estate portfolio in Atlanta and maximize returns.
Among the projects financed by Corus in Atlanta were The Brookwood in downtown Atlanta, The Atlantic tower at Atlantic Station and the Serrano in Sandy Springs.
As shown in foreclosure reports released over the past months, both condos and single-family houses have been entering lists of foreclosed homes for sale in Atlanta, with foreclosure filings rising in March by 24 percent year-over-year.
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