Posted by: BayAreaComRE | March 8, 2010

Wells Fargo Forecloses on a Page Mill Property Portfolio – CalPERS Relinquishes $100 MM Equity Stake

When Wells Fargo & Co. acquired Wachovia in 2008, it also inherited one of Wachovia’s distressed assets – David Taran’s Page Mill Properties, based in Palo Alto. Last week, Wells Fargo foreclosed on the 101-property portfolio. Chris Lund, spokesman for East Palo Alto’s Fair Rent Coalition, attended the two-hour auction held at the San Mateo County Courthouse and reported that there were no other bidders for the properties.

Taran defaulted on the loan last year and the balance due to the bank is now more than $240 million. This foreclosure will relinquish not only the California Public Employee’s Retirement System’s $100 million equity investment, but also $20 million worth of individual investments. David Wald, of Wald Realty advisors has been the owner of the building since last September and claimed that 74% of the 1,814 unit complex was occupied.

Taran’s acquisition of the apartment complex (which also includes several commercial spaces and spans across East Palo Alto’s high-end redevelopment project, University Circle) was completed through several transactions throughout 2006, 2007 and 2008. Although building ownership will change in the foreclosure, the property management group, Investor’s Property Services, will stay in place and tenants should be unaffected.

Experts in the area predict that the likelihood of an individual or company purchasing the entire portfolio is very low (thanks to local rent control standards, among other issues), even considering the accessibility and central location of the Page Mill Properties.

See the Registry’s full coverage of the story…

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