Developer Buys Failed Bloomingdale Condo Project


September 4, 2012

Developer buys failed Bloomingdale condo project

By: David Lee Matthews

(Crain’s) – A local developer has taken over a failed Bloomingdale condominium project about two years after the lender won a $27.8 million foreclosure judgment against the original developer.

A venture led by Peter Brennan of Foxford Development paid $4.5 million for 72 unsold condos at the Medinah on the Lake development and $900,000 for an adjacent parcel slated for 96 more units, DuPage County records show.

Mr. Brennan plans to rent out the unsold condos rather than sell them, taking advantage of the strong suburban apartment market.

The project had been tied up in litigation since February 2009, when RBS Citizens N.A. filed to foreclose.  Earlier this year, the project’s developer, La Grange-based Gammonley Group sued to block the sale of the project west of the Medinah Country Club.

The Foxford venture bought the properties directly from the DuPage County Sheriff after redeeming a certificate of sale it acquired from RBS.

Gammonley executives did not return calls, and an RBS spokeswoman declines to comment.

Hinsdale-based Foxford has stayed active recently scooping up other developers’ failed projects, including a 20-acre Lake Bluff site where homebuilder Orren Pickell planned a subdivision of luxury homes.  That site remains on the market.

Last year, Mr. Brennan paid $5.2 million for 52 unsold condos at 1224 W. Van Buren St. on the Near West Side, where he has boosted sales by slashing prices.

“We looked at (Medinah) and it looked like another good opportunity,” Mr. Brennan said.  “It’s a fabulous location with views out to the forest preserve and nice amenities.”

About a dozen of Mr. Brennan’s Medinah condos are finished and rent for between $1,500 and $2,100 per month.  He estimates costs “in excess in $2.5 million” to finish the other condos and stabilize the property.  He has no immediate plans to develop the vacant parcel.

The project should succeed amid a strong suburban apartment market, said Schaumburg-based real estate consultant Tracy Cross of Tracy Cross & Associates Inc.

Not only is Medinah tucked between major employment centers of Schaumburg and Oak Brook, it also benefits from a relative lack of competition in eastern DuPage County, where landlords enjoy an apartment vacancy rate of just 3.6 percent.

“There’s something like 66,000 renters in that market area that would reside there,” Mr. Cross says.  “If (Mr. Brennan) winds up coming in at a competitive position he’ll do well.”

The condos are a mix of one-, two-, and three-bedroom units, and Mr. Brennan expects to attract downsizing empty-nesters and transitional residents like transferees and people struggling to keep their homes.