(Mark your Calendars: RealShare New Jersey in New Brunswick on September 13.)
PHILADELPHIA-The Grand Leiper Apartments are trading hands for $2.025 million between two eponymous limited partnerships. Grand Leiper Apts LP is selling to Grand Leiper LP in a short sale, which represents, roughly a 20% discount on the seller’s mortgage and was done all in cash.
Eli Rosen, SVP of Gebroe-Hammer Associates represented both parties in the deal. He explained that the seller had approached him after the property was upside down on its mortgage. “At that point, the seller was out of the property, not collecting any rent, and the bank--we were in touch with the bank--letting them know that we could get them, based on my experience with this property, approximately this much money or somewhere around it, but not enough to pay the mortgage.”
The bank had received a few offers, Rosen explains, but that this one was the highest of them. The deal was struck between buyer and seller with a clause denoting that the bank approves of this price as a sufficient payment of the mortgage. “So what it does for the seller is take him out of the property without killing his credit too much,” Rosen points out. “He’s not someone who’s totally defaulted on a property and had to go into foreclosure, rather he signed a deed in lieu of foreclosure. So that’s where the seller gains on this, he does not go through the foreclosure process and he doesn’t kill his credit that way.”
The practice is more common in residential trades, he explains, but it is similar to a note sale, only with less steps involved. The property contains 52 single-bedroom garden-apartments at 4712 Leiper St. here. There is an additional five-unit property, as well as two other properties which total 28 units, all of which were included in this deal.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
