From the sddt.com:
The June Chapter 7 liquidation of what had been a billion-dollar Southern California homebuilder has reached into San Diego County and hundreds of residential parcels from Black Mountain Ranch to Oceanside have been affected.
In its Chapter 11 reorganization bankruptcy filing in February, WL Homes LLC of Newport Beach said its sales volume in 2008 was cut by more than half from 2007’s $948 million.
The company listed $1.3 billion in assets and $977 million in debt as of Nov. 30, 2008.
WL Homes, with roots dating back 161 years, was formed in April 1998 when John Laing Homes, a British homebuilder, merged with Watt Homes — an entity founded by Los Angeles developer Ray Watt.
Watt was instrumental in building much of the housing in Fairbanks Ranch, and constructed such projects as San Diego Country Estates in Ramona and The Landing condominium complex in Coronado. Laing entered San Diego County in 2002, with projects such as the 219-home Tides at Water’s End in Carlsbad and the 86-home Woodley Hills in the San Elijo Hills master plan in San Marcos.
WL, which continued to market homes under the Laing banner after the merger, had explored the possibility of going public, but opted instead to remain private. It was then acquired in 2006 by Dubai-based Emaar Properties, one of the world’s largest global real estate development companies, for a reported $1.05 billion in cash. While Emaar has reportedly invested more than $600 million in the U.S. builder since the acquisition, it informed WL at the end of last year that unsecured financing Laing would no longer continue.
At the time of the February Chapter 11 filing, the homebuilder still held out hope the company might be saved, but defaults mounted and by early June the homebuilder filed a Chapter 7 liquidation request earlier this month.
While WL prepared itself for liquidation, Bank of America (NYSE: BAC) filed motions in Superior Court to foreclose on the planned 76-home Sentinels @ Del Sur development within the Black Mountain Ranch master plan. Black Mountain Ranch LLC, the master developer of Del Sur, was also named in the foreclosure. BofA is being represented by the Costa Mesa law firm of Snell and Wilmer LLP of Costa Mesa, which referred calls to BofA.
Fred Maas, Black Mountain Ranch president, said he believe his firm was named because BofA wants to be able to sell the remaining lots without the covenants, conditions and restrictions (CC&Rs) that run with the Sentinels property. He plans to fight the lender’s move.
“The CC&Rs are there for a reason. We want to keep a tight reign on Black Mountain,” Maas said, adding that Bof A has kept him in the dark as to what is happening with the property.
What hasn’t happened with the Sentinels are sales. Opened in August 2007, WL was only able to sell four homes through the first quarter of this year and, according to MarketPointe Realty Advisors, none of those sales came in 2009. The two- and three-bedroom homes were priced from $875,000 to $921,000.
According to Superior Court documents, WL, as of about three weeks ago, owed $9.33 million on what had been a $23.39 million construction loan from BofA that was secured by the Sentinels property. BofA officials would only say the Sentinels was working its way through the court process, but that the court had yet to appoint receiver.
The Sentinels was not the only project where WL was having trouble.
BofA revealed that a court appointed receiver is already in place for the Breakaway at Arrowood development, which had 130 homes planned in Oceanside. In that case, only 34 closings were recorded from September 2006 through the first quarter of this year, according to MarketPointe. Those four-bedroom homes were priced from $454,990 to $489,900.
Sometimes, as in the case of Silhouette, a 96-home development in 4S Ranch that got underway in March 2006, the sales got off to a strong start, only to fizzle later. While Silhouette managed to close 65, it still had the remainder to sell when WL filed Chapter 11.
Three other WL projects under the John Laing banner in San Diego County also had similar problems.
These include a planned 100-unit townhome property known as Palomar at St. Cloud that posted just 10 closed escrows since it started in September 2007. Two other projects were substantially reduced from their original sizes. The San Luis at St. Cloud development in Oceanside had 14 of 16 units sold through the first quarter of this year. The problem, according to MarketPointe, was the developer originally planned a 138-unit project.
The case was a similar one at Laing Luxury Village in the Crosby Estates master plan above Rancho Santa Fe that posted 32 closings out of 35 offered through the first quarter of the year. MarketPointe said that project at some point was cut in half from its original 70 units. WL’s developments also include two major projects in Orange County. One is a 575-home project built on the former Marine Corps Air Station in Tustin and the other is a 1,000-lot development in San Clemente.
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I love the Sentinels plan 1.
The only thing wrong about it was the price…
You have money from dictators, police states, super wealthy people, foreign banks, pension funds and god knows from where else, all looking for a safe haven.
Enter the US of A. We created this housing mechanism, part of the great suburban expansion project, that allows these folks to channel money into everything that’s come to make up suburbia.
This is why we have become a tricked out country. Bling everywhere. More shopping centers than we’ll ever need. Housing projects going up here, there, everywhere. Got three corners? Hell, put up 3 drugstores, one on each corner. To put it mildy, we are over built; and we are over built because that money (mostly petro dollars and trade in balances with China) had to go somewhere.
Until recently, the US of A had the trusted financial institutions. Not anymore.
To come in line with the rest of country, and remember SD has much more limited employment than other cities, Del Sur’s homes should begin at 350k. 350k to 500k should be about right.
And I believe SD will come in- back in- line.
If I read another article about how some can’t afford gas I’m going to defenstrate my laptop.
Sentinels or Avaron in Del Sur selling in the 350-500k range? Right… would love to see a data-backed argument for that.
The lower end or the shared wall units? Sure that range is already there in some cases.
“The CC&Rs are there for a reason. We want to keep a tight reign on Black Mountain,”
Just….ugh. I imagine this guy making his Saturday morning rounds with a clipboard looking for illegal basketball hoops or verboten red petunias.
Cali is broke. When the civil unrest and riots start, no one will care about CA real estate. The prices will plunge another 30-40%.
Just wait.
“verboten red petunias”
ArtEclectic, you crack me up!
I was also envisioning him, as I read the article, scribbling in his little notebook–and with a scowl, of course.
Anyone want to buy neverland ranch?I’m sure it cause a bidding war.
Consultant,
Yeah… America, where money comes to die.
Dont the Del Sur Sentinels have a shared driveway?
Bridgewalk and pasado starting at 400s would be normal considering the Mello Roos are like 500 a month. 350 would be a good price for those townhomes, Mandolin.
Woodleys glen in SEH is getting into the 400s.
Yes, the Sentinels have a shared ‘driveway’ of sorts. It’s a fairly unique setup, but very nicely done IMHO. Pricey though, even after the price drops from 1.x to high 800’s with the MR and HOA.
You can see pictures here:
http://www.delsurliving.com/neighborhoods.php?h=sentinels
http://urbanexus.smugmug.com/gallery/3238676_Gsyfj#179092759_ymXqv
“Cali is broke. When the civil unrest and riots start, no one will care about CA real estate. The prices will plunge another 30-40%.
Just wait.”
And if that happens, are you or really anyone here going want to pick up a piece of property in a warzone?
Its like the arguments “when unemployment hits 25% NSD will plunge 50%” Thats true but only because 1 in 4 of us on this site dont have a job.
Bottom line – be careful what you wish for.
“Sentinels or Avaron in Del Sur selling in the 350-500k range? Right… would love to see a data-backed argument for that”
That’s what mid tier upscale homes cost everywhere else but CA. And in place where the middle class has better conditions.
Consider in Tampa FL, you can buy a 350k townhome on the beach.
The argument CA people have is that CA is so much better and the weather, etc..
I’d like to see data such that this is so.
Lest we all forget $150 oil was called supply and demand. LOL..
“That’s what mid tier upscale homes cost everywhere else but CA”
Everywhere else but CA? I’m sorry, that’s not true. Is San Diego above the average – yes, but it is not alone.
Town homes in Tampa FL are $350k, houses in Detroit are $8k, and I can give you lots of other examples where housing is cheaper then San Diego and quite possibly your living conditions are better.
So long as more people prefer to live in San Diego, Manhattan, or any other location you care to choose that has a higher mid tier upscale home cost – prices will be higher.
Historically San Diego has had a 4-5x ratio, which is above the national average. The data is against you.
Will CA go broke and San Diego will have a max exodus driving down prices to the US average? Anything is possible but again historical data is against you.
Housing, and where you choose to live and the price of oil are apples and oranges. Potatoes are cheaper in Idaho, does that mean San Diego homes should be cheaper too? That’s essentially your argument.
What data?
81,000 x4 =324,000
I think the comparisons of SD and NYC are quite remarkable. But not because there’s a big relation.
Your essentially saying prices are demand driven. Zero down for a 600k loan with no income requirement was the demand here. In a town with one large employer no less.
“Your essentially saying prices are demand driven. Zero down for a 600k loan with no income requirement was the demand here.”
For a time window of about 4-5 years, which was an extreme abnormality. Prices are correcting, and people are now throwing large chunks of money down as down payments.
81,000 x 4 = 324,000
81,000 x 4.5 = 364,500
81,000 x 5 = 405,000
What’s your point?
Look at the data provided by Jim, Piggington, or just about any other credible source. Homes in SD that have corrected back to their historical average are flying off the market.
Of course prices are demand driven. Did this get thrown out the window for a few years? Absolutely, but it doesn’t change the fact that people want to live here and are willing to pay more.
Bubble prices are going away. But I’m not hearing any strong argument as to why San Diego which has historically always cost more then the US average, will suddenly lose all the demand.
Have you ever once read on this forum “I wish I could live in Florida, but I can’t afford to.” This forum and others are littered with posts like that about San Diego. Higher demand, higher prices.
In a town with one large employer no less.
Qualcomm? SDIC? Military? UCSD? Sharps? Scripps? Sempra? USD? Which one are you referring to?
Again, another argument with no data to support it.
“I wish I could live in Florida, but I can’t afford to”
The nicer parts of FL are more wealthy and exclusive than SD and even LA Jolla.
SDnerd the rest of the nation is not the abyss CA seems to want people to think it is. No doubt SD is nice and a great place to be.
“The nicer parts of FL are more wealthy and exclusive than SD and even LA Jolla.”
Agreed.
So what exactly is your argument then as to why San Diego is going to fall to the national average, despite historically always being above it?
You have to understand, your belief is akin to “real estate always goes up in price” when you not only don’t back it with any data – but you do so in front of an avalanche of data against you.
SDnerd,
81,000 x4= 324,000
Sigh…
Stating that 81,000 x 4 is equal to 324,000 is about as meaningless as me saying the median home price for Southern California was $247,000 in April.
Your claim is not that SD prices should be in their historical norm, which is 4x-5x but to be in line with the rest of the country around ~3x.
If you can’t back that up, it’s okay.
Giving Town Home prices in Florida, and saying you want data on San Diego weather being nicer isn’t really a very compelling argument.
‘81,000 x4= 324,000’
You are forgetting the down payment. If one can’t come up with a down payment then one need to a) save more money b) utilize a second income c) or move elsewhere. Housing is not an entitlement. This really is academic.
We all need to be reminded that EVERY decade in American history has been different than the last. Every-single-one.
To a very large degree, that is what makes our history and culture completely different from other nations. That’s why so many people are fascinated by American culture.
We change so much because we have a constitutional form of government and because we have capitalism as our economic model. Both insure constant change in our system. New political leaders, new ideas, new businesses, new winners and losers.
If American history can serve as a reliable guide, the next decade is NOT going to be like this one. Based on the disastrous Bush presidency, and the so far feeble and foolish (at least on housing) moves of the Obama Administration, I’d say the next decade is going to be WORST than this decade.
For the younger people out here, I feel for you. You’re in for a period you never imagined. You came of age in a period of super available credit that was actually highly abnormal. This can’t continue and it won’t. Credit is now “tight” and people without memory are just waiting for things to return to “normal”.
Normal just ran out.
I don’t think credit is all that tight, provided you pay your bills and therefore have a good credit score. The last couple weeks I have been furnishing my new home. I was able to get credit at every store I went to, all of it with discounts (no interest or payments for six months or a year, 10% of the bill, that sort of thing). I opened six new accounts in little over a month, with four of them opened within the last week. If credit was tight, the last couple accounts should have been declined or issued for small amounts-but the last one I opened they gave me a limit of more than ten times what I needed. I also had no problem getting a home loan in the first place.
I somehow stumbled upon this blog and find it humorous. Most of these blogs are filled with people that don’t even own a home, realtors that can’t sell, and people that have nothing else to do but continue to work at a boring, deadend job.
Sentinels cost more to build than $350k, JimB. You obviously know less about construction and cost of materials/labor than you do comparing housing units in uncomparable areas of the country. Florida…ha! Totally different set of complicated circumstances.
So, when looking at Sentinels as a housing unit. Yes, a single level home is more expensive because you can’t spread out the cost over the square footage like you can with a two-story home. It takes more land to get that necessary space. These are decent size homes, Jimbo. Also, you need to understand the luxury appointments. Arched doorways are BIG time expensive to construct compared to what you are most likely renting. There are a ton of other upgrades that were considered standard for that project.
Also, MarketPoint data is true, but does not take into account that the builders had HUNDREDS of interested buyers, but WL was buying the land in take downs and the lots these people were waiting to buy were in future phases that WL didn’t own yet. Bad phasing strategy in a downward market and Laing never gained momentum!
Personally, Sentinels was my favorite neighborhood in Del Sur…by far. I fell in love with the floorplans when Bill Watt (not Ray) built them in Santaluz. All the others neighborhoods were…uh…predictable.