THE BALLS BEGIN TO FALL
Finished product with little or no sales and big demands on cash flows will push developers into giving up the ghost and going to fore closure. Deal s will be had for the investors with cash to clean up the train wreck. Following is a short scenario of one such property.

Developer James Westmoreland out of Sarasota was the developer of OLD Town Condominium development. With lofty goals of a flex space condo development of 21 units located on Acline Rd. off of the Jones Loop Exit at I75. What kind of market research could he have done? Coming out of the gate with a marketing sales price at $150.00 per SF being $30Sf higher than other similar type product .Who did he think was going to grab up these properties? Did he realize that in the works (and now vacant) was an estimated additional 150,000 SF of flex space just on the Punta Gorda Side of the river.
Of the 21 units available 18 ended up being foreclosed only 3 units changed hands 2 units to one Sarasota investor and one to a New York investor
It makes one wonder what kind of due diligence was conducted by the bank and the developer. Yes an appraisal was done. But was a needs analysis done? Was there a survey of the Charlotte County Development department’s pending and approved developments? It seems that everyone was caught up in the fervor of speculation.
The developer moved forward and the units were constructed THEN………..

M & I Bank in Oct 2007 and the developer modified the existing loan on 18 units to a new amount of $3, 928195 The appraisal used mostly Ft Myers comps for the sales and for the income approach the current tenants were mostly not arms length tenants as they were OLD Town entities lease rates were at $12 SF to $15 SF NNN which was unrealistic for the market place. BUT on 11/5/2007 the modification was recorded.
Then in May of 2008 the bank filed for foreclosure.
And in Feb 2009 a local investor bought the 18 Units for a mere $855,153 or $24.14 SF

A quick summary

Developer James Westmorland
Old Town Development a condominium complex
Product Flex Space office/warehouse development
Located on Acline rd.
Offered as condo units
3 buildings, 13,860 SF, 13,860, 13,869
Initial offer price $149SF & $150,000 SF
Loan amount last modified 11/15/2007 $3,928,125
Bank M & I
5/14/2008 bank files for foreclosure
Foreclosed 18 units. 35,442 SF
02/2009 sold for a total of $855,153 or $24.14 SF