PHOENIX-The Arizona Superior Court ruled that a portfolio ofseven apartment complexes in Arizona can be sold while inreceivership. The 2,759-unit portfolio, which was purchased by TheBethany Group about five years ago, is now in escrow to StandardPortfolio, a real estate investment company, for $123 million.

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The portfolio includes the 460-unit Laguna Village; the 320-unitAlante at the Islands and the 374-unit Santana Crossing inChandler, AZ; the 432-unit Whispering Meadows and the 582-unitTuscany Palm in Mesa, AZ; the 395-unit Sienna Springs in Phoenix;and the 196-unit Verrado Park in Glendale, AZ.

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The Bethany Group, an Irvine, CA-based real estate andinvestment firm, bought the properties as a portfolio and obtaineda single loan for all seven communities. It abandoned the class Aproperties in spring 2009. The desertion resulted in deferredmaintenance, unpaid employees and suppliers and many concernedresidents who suffered through moldy pools and no garbage service.In March 2009, San Diego, CA-based receivership and loan recoveryspecialist Trigild was appointed receiver of the Arizonaproperties, as well as six other properties throughout thecountry.

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“The properties were definitely neglected and had received a lotof bad press,” says Trigild president Bill Hoffman. As receiver,Trigild’s addressed restored order by addressing maintenance andrepairs and ensuring efficient operations. The firm improvedoccupancy and revenues, as well.

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Hoffman tells GlobeSt. the properties garnered a huge amount ofinterest and generated roughly 60 offers. “The assumable financingmade all the difference,” he says, pointing out that the specialservicer would not have been able to offer assumable financing ifthe court had not allowed the properties to sell while inreceivership instead of waiting for foreclosure. “The availabilityof financing for this sale allows us to deliver a much betterrecovery for the lender, in this case more than $53 million abovethe best 'all cash' price."

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Many states require lenders to foreclose on properties beforeselling them. However, some states, and the federal courts, alreadyprovide for such receiver sales, but often only if the borrowerdoes not object.

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Arizona had no specific rules allowing or forbidding, andHoffman argued, over strenuous objection by borrower's counsel,that the court could exercise its equitable powers to do what wasmost beneficial for all parties.


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