GE Forecloses on 2,284 Apartments in Alabama

This article is short on details but of interest to our local market. More details here.

Risky GE Apartment Loan –

GE Real Estate, a unit of GE Finance, foreclosed Jan. 6 on a portfolio of 2,284 apartments in Alabama. Brooklyn, N.Y.-based Collins Group LLC with backing from New Jersey-based Lightstone Group bought the apartments in late 2006 for $155 million. GE lent Collins $148 million in a two-year bridge loan, according to several people familiar with the matter. That would put the original loan-to-value ratio at 95%, not very conservative.

GE Real Estate spokesman John Oliver confirmed that GE has taken over the property after the loan matured and Collins Group was unable to refinance. GE has installed new management and is funding renovations.

Why such a high loan-to-value? “It was an extremely competitive marketplace two years ago and obviously the world has changed,” Mr. Oliver said.


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