June 10, 2009
There have been a flurry of articles out recently discussing the mounting troubles at Opus West and a possible bankruptcy filing. The company has been facing mounting problems and is seemingly following right behind Opus South, another division which Chapter 11 back in April. I raised questions about the health of Opus West at that time.
Opus West has recently come under pressure of mounting defaults at several of its projects, including a project in Texas, and now the Glendale Corporate Center are under threat of heading back to the lender.
Globe St. is out with an article which makes in which the company indicates it is seeking to avoid a reorganization. What I find extremely peculiar in this article is a quote from a company exec proclaiming:
“To date, there have been no head count reductions or bankruptcy filings.”
Is that right? Try lobbing a call into the (former) Pleasanton office of Opus West, or the office in Sacramento. I’m not sure what they are referring to, but there have been fairly significant cuts at Opus West already.
Anyhow, they’ve got some speculative projects in the Bay Area that are not doing so hot, which will probably add more fuel to the fire. One such project is Fremont Tech Center, an office/industrial condo project consisting of some 33 one and two-story units located southwest of 880 and Gateway blvd in Fremont.
I’ve heard from a fairly reputable source that the project is headed back to the lender, which seems entirely plausible given the limited sales activity at the project. I must admit though, I don’t know what they were thinking to come out of the ground at the time they did. They acquired the land around the 2nd quarter of 2007 for about $20 psf, and began construction on the project as the economy was beginning to tank. I suppose the loan was locked, the steel was ordered, and there was nothing else to do but build?
- Opus West To File Chapter 11; Opus East Chapter 7
- Opus South Files Chapter 11 BK
- Opus West Finishing Up Sierra Point in Brisbane
- Blockbuster Exploring Bankruptcy?
- Cheaper Rents Bolster Fremont Activity