Just as foreshadowed on 7/15/10, the Standard-Examiner reports that the Junction's Earnshaw Building goes on the auction block this afternoon on the courthouse front steps, a victim of the still-collapsing U.S. real estate bubble:
• Trustee sale at JunctionWith depressed U.S. commercial real estate prices still levitating at recession lows, it's a bad time for any commercial real estate lender to be scheduling a foreclosure sale. Despite the lender's chirpy optimism that private parties will possibly show up to bid however, it's obvious that the current loan balance likely exceeds the value of the property, so we'll predict that this failing project will ultimately revert to First Community Bank's (FCB) Real Estate Owned (REO) portfolio.
In the event that FCB does "take back" this property, the scenario will not bode well for the early completion of the Earnshaw Project, inasmuch as FCB will no doubt opt to keep the property on its books and await a rebound in the commercial real estate market, rather than dispose of the property at a loss. Unless and until FCB is able to rid itself of this "underwater" REO liability, don't expect FCB to invest another dime of its own money in the Earnshaw property.
Update 9/28/10 8:45 a.m.: The Standard-Examiner carries the post-foreclosure story this morning, in which a "dejected" First Community Bank Senior Vice President Bob Parks reveals that he still doesn't recognise the reality that the Earnshaw Building financing had been over-leveraged by a factor of almost 100%. And this moron Parks is apparently still employed as an executive officer at a local bank. Scary:
• Lone bid received for 32 Earnshaw Building units
