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BIRMINGHAM, AL-Less than three years after its acquisition by Collins Group LLC, a 2,284-unit class A portfolio has gone back to lender GE Capital following default on a $148 million bridge loan. The Brooklyn-based owner was unable to secure refinancing for the locally based 1,080-unit Grand at Galleria and the 488-unit Riverchase Landing, and the 736-unit Reserve at Research Park in Huntsville, AL.

Collins Group finance and acquisition vice president Jay Herman tells GlobeSt.com the three complexes, acquired in late 2006 for $155 million, are the company’s only defaults at this time. “Unfortunately, at the time when we bought these, we didn’t have a crystal ball to see what would happen in two years, and we ended up taking a bridge loan,” he explains. “It’s challenging times. The economics on the ground aren’t great, and the climate with investors isn’t great.”

In Birmingham, Grand at Galleria is at 2135 Centennial Dr. while sister property Riverchase Landing, is at 1000 Riverchase Trail and 200 River Haven Circle. In Huntsville, Reserve at Research Park is at 6200 Rime Village Dr. NW.

Herman says Collins Group maintains a positive relationship with GE under the circumstances, and both parties are continuing to negotiate options for the properties. He says some loans on other Alabama assets are close to maturity, and indicated Collins Group is in touch with the institutions holding the paper.

At one time, Collins Group owned close to 5,000 units in the Alabama and was partially assisted with financial backing from New Jersey-based Lightstone Group. “We’ll do our best to hang onto the rest of the Alabama portfolio,” Herman says.

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