Berkeley Investments principal Young Park is denying reports that he is close to losing much of his Fort Point office portfolio, saying talk of a foreclosure at the former Boston Wharf Co. warehouses is a negotiating tactic by lender Wells Fargo.
"We are in negotiations with them," Park said. "The story is, it’s a maturity default, we’re cooperating with the lender to find a solution, and a solution will be found one way or another. These properties are cash-flowing. We’ve never missed a payment. There’s no distress of any kind."
Berkeley will negotiate a loan extension, find replacement debt for the maturing loan or buy back its own note from Wells Fargo, Park said.
"We certainly have the financial capacity to do one of those three things," he said. "This is not great publicity, but it is what it is, and we need to deal with it. There’s no way we’re going to walk away."
The Boston Herald reported yesterday that Berkeley is facing foreclosure at nine of its Fort Point properties. The newspaper cited a legal notice announcing a May 5 sale of the parcels.
But Young told Banker & Tradesman Berkeley’s capital partner remains fully committed to the Fort Point portfolio, which includes several hundred thousand square feet of brick-and-beam office space, as well as two Congress Street warehouses slated for redevelopment.
The firm’s FP3 condominium development, which is more than half sold, and which recently netted FHA financing approval, is covered by a separate loan, and is not part of the negotiations with Wells Fargo.
Berkeley acquired a large slice of the Wharf Co.’s Fort Point holdings in 2004, for $97 million. Three years later, the company spun off seven properties to Newton-based National Development, for $74.25 million. The matured note, originally written by Wachovia, has a face value of $41.5 million.
Wells acquired Wachovia in October 2008, for $15.4 billion. Wells essentially scooped up Wachovia’s least-toxic assets at 30 cents on the dollar. The bank is now attempting to close out many legacy Wachovia assets. Any loan the bank can liquidate above the 30 cent purchase price is pure profit.
"It’s a sign of the times," Park said. "We have legacy projects we’re managing, and at the same time we’re trying to seize opportunities in the market. We’re not unique."
