BOULDERS CONDOS: CONVERSION & SALE TURNAROUND

Background

Several families had invested in a condominium conversion project and guaranteed the construction loans, which initially seemed promising. However, when the Great Recession hit, the developer went bankrupt, leaving the project incomplete. The families discovered that some units had been abandoned, water damage had occurred, site materials were missing, and permits were incomplete. With the bank threatening foreclosure, the potential loss for the families was over $10 million, and the project was at risk of falling into default.

Approach

Trinity was brought in to assess the situation and devise a strategy to prevent a devastating loss. We quickly formulated a five-part plan to address the project’s challenges:

Assessing the development’s condition: A thorough evaluation was done to understand the project’s status and identify the most pressing issues.

Evaluating alternatives: We considered various paths to move the project forward, including options to mitigate losses and minimize risk.

Communicating and coordinating with the families: Clear communication with the family investors ensured alignment on goals and actions.

Assembling a team to complete the conversion: We brought together a team of experts to address the construction issues and bring the project to completion.

Creating a plan with the lender: We developed a plan in collaboration with the lender to avoid foreclosure and work out a mutually agreeable solution.

To generate revenue, we re-engaged the development’s sales team and adjusted pricing to reflect current market conditions. The completed units were sold quickly, and excess proceeds were applied to the loan and remaining construction costs.

Outcome

With Trinity’s strategic guidance, all units were successfully repaired, completed, and sold within a few months. The lender agreed to a settlement, avoiding a costly and emotional legal battle. While the families did need to contribute some funds to close out the project, the settlement was a fraction of the potential $10 million loss they would have faced had the project gone into foreclosure.