SALT LAKE CITY-Silverleaf Financial has purchased a multifamily project here at a steep discount, buying up a $17.7 million non-performing loan on the Broadway Park condominiums. The $20 million project includes about 10,000 square feet of retail.
Local architect Ken Millo started the project through his firms Urban Associates and Allen Millo Associates. However, after finishing 35 of the planned 86 condos, the project bloomed to $20 million, and buyers dropped out after values went south during the recession. The lender who financed the deal also went under and was taken over by US Bank.
Kennedy Wilson Auction Group arranged the sale of the condos for about $5 million total in November, but Millo was not able to handle the closings, Silverleaf CEO Shane Baldwin tells GlobeSt.com. He says his firm recently bought the note secured by the project for “well under $10 million" from US Bank.
“We’ll work together with the developer to sell the condos,” he says. “We bought the debt at a deep discount, so the auction sales, we’ll make those happen. We should be easily able to find buyers at $246 per square foot, the Salt Lake City market is currently at about $300 to $350 per square foot.” The majority of the newly constructed high-rise condo developments are considered luxury, putting Broadway Park in a good position at a lower price point, he says.
He says Millo has to hit certain milestones on the project, including finishing and finding buyers for phase two, so that Silverleaf holds off foreclosure. “Sometimes it’s easier to work with small companies such as ours rather than a bank,” Baldwin says. The loan is also secured by two liens on separate retail units in the city.
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