Many banks have sold properties that enter foreclosure for less-than-market value prices.
In recent years, many banks have sold commercial properties that enter foreclosure for less-than-market value prices. Many of these sales have turned into net losses for banks, where they are able to recover only a portion of their commercial real estate development loans.
Wauwatosa-based The Equitable Bank is taking a different approach with Mission Lakes, a luxury senior condominium community built on Florence Lake in Okauchee. The bank took control of the development on April 20.
“The easy way out would have been to slash prices and get rid of it as soon as we could but we knew that wouldn’t be a good situation for anybody,” said John Matter, president and CEO of the bank. “We owe it to both our stakeholders and the current residents of Mission Lakes to do everything possible to recover our investment and maintain the property values.”
Mission Lakes’ first phase, a 21-unit luxury condo development with units ranging from 1,150 to 1,750 square feet, was completed in 2003. The second phase, under construction now, will have 36 new units.
The Equitable Bank is the lead lender an approximate $8 million commercial loan to build the second phase of Mission Lakes. The bank is putting an additional $115,000 into the project to help fund its completion, said Tom Sattler, vice president of sales and marketing.
“We’re putting a significant marketing effort into it, too,” he said. “We’ll be doing some advertising and direct mail soon.”
The Equitable Bank has partnered with Lemel Homes, a Glendale-based home construction firm, to complete the construction at Mission Lakes. While the bank owns the unsold portion of the condo facility now, it will no longer be involved once all of the units are sold.
“The bank will be marketing them, with the help of Lemel Homes,” Sattler said. “They’ll run the sales.”
Mission Lakes will hold a grand opening for its second phase in late May. For more information, visit www.mission-lakes.com.