Commercial Real Estate and Residential Real Estate and Development/Redevelopment and 2011 Year in Review

Real estate meltdown leaves developers reeling

December 24, 2011
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It was another rough year for the real estate sector in 2011, as the homebuilder Estridge filed for bankruptcy, strip-center specialist Broadbent struggled to hold onto its headquarters, and Centre Properties faced a $43 million foreclosure suit.

Local homebuilder Paul Estridge Jr. in late September filed Chapter 7 personal bankruptcy, agreeing to surrender his two homes—one in Westfield and one in Florida—and other possessions to satisfy a mountain of debt he accrued from his former business.

Estridge said he owes a list of creditors including banks, suppliers and vendors more than $50 million. In a bankruptcy filing with the U.S. Bankruptcy Court Southern District of Indiana, Estridge listed assets worth between $1 million and $10 million. Estridge told IBJ he thought his assets had a value of $5 million or less.

The Estridge Group, a fixture in the Indianapolis-area’s homebuilding industry for more than 40 years, became part of Houston-based David Weekley Homes in April when the company could no longer keep up with a mounting pile of debt. Estridge took over the business from his father, Paul Sr., in 1992.

Lenders in 2011 began foreclosure proceedings on The Broadbent Co.’s downtown headquarters as part of a $25 million federal lawsuit against the Indianapolis-based real estate developer.

realestate Lenders sought to foreclose on properties held by The Broadbent Co. and other retail developers. Estridge was among the homebuilders unable to withstand the downturn. (IBJ File Photo)

The Huntington National Bank and PNC Bank filed the complaint in U.S. District Court in Indianapolis on July 22, charging that Broadbent defaulted on various construction loans and mortgages dating from February 2007.

Broadbent, a strip-center real estate specialist, borrowed money to buy and renovate its headquarters at 117 E. Washington St.

IBJ reported in July that George Broadbent sold The Broadbent Co. to his wife, Mary Clare Broadbent, for $50,000 in March 2010 as the mounting lawsuits threatened his control of the company.

As lenders circled, Broadbent also transferred his ownership interests in five retail properties to his wife for “estate planning reasons,” and sold to her his ownership interest in nine other properties for $150,000, court records show.

Broadbent’s properties seeking bankruptcy reorganization include the Castleton Plaza and Greenwood Pointe shopping centers.

The developer Centre Properties also was ailing in 2011, as Boston-based U.S. Bank filed to foreclose on its 130,000-square-foot Centre North Shops at 8510 E. 96th St. in Fishers, the 17,900-square-foot Southport Shops at 7225 U.S. 31 South, and the 13,300-square-foot German Church Shops at 10935 E. Washington St.

Centre Properties, founded in 1985 by Craig W. Johnson and James F. Singleton, has developed more than 2.2 million square feet of retail space in the Indianapolis area, according to the company’s website.

The bank brought the $43 million foreclosure lawsuit in November.•
 

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