Carnage from the recession continues in the Las Vegas commercial real estate market, with banks moving to foreclose on additional properties.
Among the latest to be hit with a foreclosure filing was a real estate investment company called Tropicana Partners 2, which has three strip malls in Las Vegas and Henderson.
Tropicana Partners 2, controlled by investors Barry Ford of San Jose, Calif., and William Sousa of Saratoga, Calif., filed for Chapter 11 bankruptcy reorganization on April 1 in hopes of blocking foreclosure proceedings and salvaging its business.
The company listed assets of $8 million against liabilities of $15.5 million.
With the recession appearing to have affected occupancy at its centers, the company said its income fell from $1 million in 2009 to just above $818,000 in 2010.
On Wednesday, secured lender Branch Banking & Trust Co. of Winston-Salem, N.C. asked the U.S. Bankruptcy Court in Las Vegas for permission to foreclose on the properties, saying Tropicana Partners 2 has no equity in the developments and "the current value of the property is significantly less than the secured indebtedness."
"In the current real estate market, there is no possibility of selling or refinancing the property to generate sufficient monies to pay off the BB&T secured loans," said the filing by the bank, which picked up the mortgage loans when it acquired certain assets of the failed Colonial Bank on Aug. 14, 2009.
The properties listed in the foreclosure filing are at 5693 S. Jones Blvd. and 9827 W. Tropicana Ave. in Las Vegas and at 594 N. Stephanie St. in Henderson.
Attorneys for the bank said in their filing that Tropicana Partners 2 is in default on the loans encumbering the properties and that $5.6 million is due on the Jones Boulevard loan, $4.2 million is due on the Tropicana Avenue loan and that $5.6 million is due on the Stephanie Street mortgage.
They added in their filing, "The property has already declined in value significantly since the various loans have matured and the debtor filed for protection under Chapter 11. Moreover, BB&T’s secured position will continue to further erode as unpaid tax liabilities continue to accrue on the property."
Attorneys for Tropicana Partners 2 have not yet responded to the request that the bank be allowed to seize the properties.
In another Las Vegas commercial real estate bankruptcy, TBG Development I LLC filed for Chapter 11 on April 14.
Managed by Christopher Bentley of the Bentley Group Real Estate Advisors, TBG Development I LLC in June was hit with a bankruptcy court foreclosure filing by Nevada State Bank covering a development at 7601 Grand Teton Drive in Las Vegas that was intended to include a childcare center and an office building.
The bank said in its filing that the childcare center was built, but construction was halted on the office building and it has no tenants.
Nevada State Bank said it’s owed $4.1 million for property valued at just $3.1 million and that the company defaulted in 2009.
The bank said in its filing it planned to foreclose on the buildings on April 15, but that was halted by the bankruptcy the day before.
"The (bankruptcy) petition was filed as a stall tactic to block Nevada State Bank’s eventual foreclosure on the property," the bank charged in its bankruptcy court filing asking the court to allow it to foreclose.
TBG Development I hasn’t yet responded to the foreclosure motion – its law firm in the case, Goold Patterson Ales & Day, asked to withdraw from the case on June 27, citing a "breakdown of the attorney-client relationship."