Thursday, January 15, 2009

Oakland Condo Project in Default

The Contra Costa Times reports Upscale Oakland project in trouble

The owner of the 901 Jefferson complex in downtown Oakland, consisting of 75 for-sale condominiums, has defaulted on a $26 million construction loan issued in 2006, Alameda County property records show. The project is owned by 901 Jefferson Housing LLC, an affiliate of Oakland-based A.F. Evans Development Inc.

The difficulties that haunt the Oakland project may be a warning that the recession that began with falling home prices and rising residential foreclosures has morphed into new kinds of financial gremlins for the economy.

A.F. Evans is a realty firm with numerous successful projects over the years. The company initially devised what seemed, in 2006, to be a smart strategy: Sell the units as condominiums. But the implosion of the housing and mortgage markets torpedoed that gambit.

"The downturn in the economy, plus the downturn in the condominium market, has made selling that property as condos not feasible," said Arthur Evans, president and chief executive of A.F. Evans.

It's possible the lender, Keybank National Association, could attempt to seize the property through a foreclosure of the construction loan. The development is located on Jefferson Street between 9th and 10th streets.