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Royal Palm Beach shopping center facing foreclosure

A shopping center in Royal Palm Beach is facing foreclosure due to a $37.5 million loan. The shopping center is said to be 293,050-square-feet. A foreclosure hearing was filed on April 10 for buildings residing on 30.3 acres. One tenant leased out 86,479 square feet of retail space. A couple of other businesses have taken out space in excess of 30,000 square feet.

The loan on this property is said to have been delinquent since November. While the interest rate on the loan is now at 6.37 percent, a lower interest rate had been granted for a two-year period in hopes of helping the borrower out. While the property brought forth revenue of $2.29 million with a net operating income of $1.1 million in 2012, this did not appear to be sufficient to allow for the loan payments to be made.

A loan workout deal may still be in the works. While the property was purchased for $38 million in 2007, the appraised value reportedly is only $15 million.

Attorneys experienced in this area can work with lenders and negotiate a deal that is suitable to everyone. Some sort of loan modification or loan workout deal could be necessary in such circumstances to prevent a number of individuals from being injured financially.

This could even apply to the lender. If the lender forecloses upon the property they will have to go through a possibly expensive and lengthy foreclosure process and then look for other prospective buyers. In the meantime the property will have to be maintained and this could also prove to be costly.

Source: South Florida Business Journal, "Shopping center in foreclosure over $37.5M loan," Brian Bandell

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