Condo Auction Bittersweet for Developer

HAYWARD, CA-The 34-unit luxury townhouse development that replaced a run-down mobile home park near the BART station here was a long time coming. Too long, in fact; by the time Forest Circle was completed the recession was in full bloom and the value of the units had dropped well below what it cost to develop.

With the lenders approval, developer Forest Circle LLC sold the 31 remaining unsold units at auction earlier this week. There were 175 bidders. The 31 1,200- to 1,600-square-foot units sold for a combined price of more than $11.5 million, according to Kennedy Wilson Auction Group, which conducted the Oct. 25 event at The Freemont Marriott.

Kevin Herman, the owner Herman Commercial Real Estate of Walnut Creek, CA, a member of the LLC who provided some of the equity for the main developer, Scott Andrews. Herman tells GlobeSt.com that the revenue from the sale of the units wasn’t even enough to make the lender whole, let alone the development entity. Andrews was out of town Monday and could not be reached for comment.