An affiliate of the Davis Cos. has scooped up the remnants of a soured condominium project in Boston's Fenway neighborhood for $13.51 million.
The company purchased 41 unsold units at the Audubon Park development at a foreclosure auction yesterday.
"We think this is a great opportunity," said Jonathan Davis, CEO of the Davis Cos. "At this point in the cycle, we're focusing on acquiring assets at significant discounts to their replacement cost, and this certainly fits the bill. It's a very-well-built asset in a great location, perched in the heart of the medical and educational cluster in Boston. It really is a great asset."
Davis said his company hasn't decided if the units will be marketed for sale or rent. It's been about four years, and at least a dozen foreclosure auctions, since his firm has won an auction. The auction yesterday was conducted by Paul E. Saperstein Co. of Holbrook.
"There are going to be lots more opportunities to buy with the same kinds of value metrics, as the backup of distressed debt moves through the system," he predicted.
Davis has acquired roughly $160 million in debt since the commercial downturn began. Audubon Park is Davis's first Boston-area distressed acquisition.
Audubon Park was developed by Hub builders Fox Development, and financed with a $23.6 million construction loan from IndyMac.
The 53-unit project started strong, but unraveled as the condominium market began skidding, and IndyMac buckled under the weight of failed development bets in California. Fox Development sold 10 units before IndyMac's failure, at prices ranging from $400,000 to $725,000.
Fox's construction loan matured in December 2008, when IndyMac was still in FDIC receivership. An LLC controlled by IndyMac's successor, OneWest Bank, sued Fox Development in Suffolk Superior Court to recoup the construction loan's unpaid balance.