`

Real estate investment firm files bankruptcy

November 10, 2008

An Idaho real estate firm that sold interests in central Indiana properties to dozens of investors around the country filed for Chapter 11 bankruptcy protection in Delaware today.

DBSI Inc.'s local properties include three buildings in the Allison Pointe office park, and an office building at Heritage Park; both locations are on the northeast side. DBSI also owns Intech Eleven, a distribution building on the northwest side, and the Southport Pavilion retail strip on the south side.

DBSI Inc. had amassed a portfolio of more than 250 buildings around the country worth about $2 billion, selling fractional ownership interests to more than 12,000 investors. The so called tenant-in-common arrangement allowed investors to defer taxes by redeploying proceeds from the sale of other buildings into DBSI properties. In return, the company promised its investors a steady, hassle-free dividend.

Trouble is, DBSI overpaid for many of its properties and sold them at even higher markups to its investors, market observers told IBJ for a story in this week's print edition. Many of the buildings in DBSI's portfolio are generating enough revenue to pay the bills, meaning those investors will get something. But other investors will be lucky to walk away without owing more than they invested in cash.

DBSI stopped paying dividends to investors in October and fired most of its staff, sparking a deluge of concerned calls and e-mails from investors.

Read the IBJ full story.

Source: XMLFULL/XMLFull23537.xml
ADVERTISEMENT

Recent Articles by Cory Schouten

Comments powered by Disqus