Foreclosure finalized for The Tides condos in Mount Pleasant
A large investment house and a smaller firm that specialize in turning bad loans into profits have snapped up the 50 unsold condominiums at the luxury Tides development in Mount Pleasant.
The deal reflects a growing appetite for foreclosed properties among hedge funds, private equity firms and other professional money managers.
Neuberger Berman of New York and Strategic Value Partners of Greenwich, Conn., operating under the name Charleston Harbor Holdings LLC, acquired the upscale residences at a courthouse auction Tuesday.
“Anybody can bid, but I suppose it’s going to be a pretty big number,” said Charleston County Master-In-Equity Mikell Scarborough.
Indeed, attorney David Wheeler, local counsel for Charleston Harbor Holdings, set his opening offer at $5 million, more than enough to seal the deal. No one countered.
The $5 million bid was credited from the roughly $43 million the project’s developer owed Charleston Harbor Holdings.
After the sale, Wheeler said he could not talk about the new owner’s plans. A New York spokesman for Charleston Harbor Holdings declined to comment, though it’s widely expected that the units will be marketed for sale.
Neuberger Berman has more than $200 billion in assets under management, and the financial executive who engineered The Tides deal is Michael Holmberg of the Chicago office. He previously worked at Strategic Value Partners, which oversees about $4 billion, and he specializes in investing in “distressed debt,” such as bonds or other loans that have gone bad but still have moneymaking potential.
With The Tides, Charleston Harbor Holdings bought the delinquent mortgage from Bank of America in June. Terms were not disclosed.
The Tides is at the base of the Ravenel Bridge off Wingo Way and boasts commanding views of Charleston Harbor. It cost more than $103 million to build.
The 121-unit upscale development was first proposed in late 2004, when the local real estate market was still on the upswing. Most of the condos went under contract shortly after the deal was announced, but the economic downturn had come into play when construction wrapped up 2008.
By then, some would-be buyers no longer qualified for financing as banks clamped down on large mortgages known as “jumbo loans.” Others purchasers sought to escape their contracts, saying their units weren’t completed within the agreed-upon schedule.
Prices for the unsold condos ranged from $600,000 to $3.9 million in 2009.
After developer Carolina Eastport LLC fell behind on its loans, Bank of America filed lawsuit to seize The Tides in November 2010.
Reach John McDermott at 937-5572.