A Charlotte real estate group on Monday acquired a portfolio of 135 soured residential developments in metro Atlanta from Georgia’s second largest bank.
Mountain Real Estate Capital (MREC) bought the bundle of failed projects, valued at $110 million prior to the economic collapse, from Synovus Financial Corp. Terms of the deal were not disclosed.
It is the second such deal this year between Synovus and MREC, which also bought $51 million in nonperforming loans from the Columbus-based banking company in March, MREC Chief Investment Officer Arthur Nevid said.
Synovus is the parent company of 30 Southern community banks, including Alpharetta’s Bank of North Georgia and Columbus Bank & Trust.
The latest portfolio includes about 1,300 acres with more than 1,500 home sites in the metro area. Most of the portfolio is empty lots, home starts and a small number of finished houses. Some commercial property is also included.
MREC plans to resell some lots to builders and partner with other developers to jump-start construction of failed residential projects, Nevid said.
“The plan is to sell what’s sellable now and joint venture in what makes sense to start building,” Nevid said.
Synovus has been battered by the downturn in the economy and the collapse of the housing and commercial real estate markets. The company lost $215.7 million in the first quarter of this year.
The regional lender reports second-quarter earnings July 22. Analysts expect a loss of 31 cents per share for the second quarter, according to SmarTrend.
Synovus has been aggressively selling off soured real estate loans as it works to repair its balance sheet. With $32 billion in assets, the regional banking company has lost more than $2 billion since 2008.
Chris Marinac, bank analyst with FIG Partners in Atlanta, said Synovus likely sold the loans for about 50 cents on the dollar. The second quarter should be telling about what new problems have emerged, he said, and what success the company has had in spinning off poor loans.
“This is just part of the process,” he said.
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