Page Mill Properties Go Back To Bank
Submitted March 3, 2010, 6:17 PM
A bold redevelopment play in East Palo Alto spearheaded by Bay Area developer David Taran and his Page Mill Properties has reached its anticipated end: The bank has foreclosed on the 101-property portfolio.
Wells Fargo & Co., which inherited the loan when it acquired Wachovia Bank, opened bidding on the sites at an aggregate $142 million, according to Chris Lund, a spokesperson for East Palo Alto’s Fair Rent Coalition and an East Palo Alto resident. Lund attended the two-hour auction held on the steps of the San Mateo County Courthouse. There were no other bidders for the properties, he said. The outstanding balance due the bank was more than $240 million, according to public record. Taran defaulted on the loan last year.
The properties have been under the control of southern California receiver David Wald of Wald Realty Advisors Inc. since September. Wald told The Registry in late January that the portfolio consisted of 1,814 apartment units that were 74 percent occupied.
Taran purchased the apartments in multiple transactions in 2006, 2007 and 2008. They include several commercial properties in addition to the apartments and are clustered on either side of East Palo Alto’s standout redevelopment, University Circle, which includes a Four Seasons Hotel and several Class A office towers. Court documents hint that Taran’s goal was to redevelop the properties, but Taran and CalPERS have been highly secretive about their plans.
The bank is “evaluating long-term strategic options for the properties,” Wells Fargo Managing Director Sean Barlas said in a prepared statement.
Wells Fargo spokeswoman Elise Wilkinson said it was “too early at this point to know what direction we will go in.” Investors’ Property Services, a property management company retained by Wald, will continue as the property manager, she said, and tenants in the units should not be affected by the ownership change.
Wells has engaged affordable housing developer Bridge Housing Corp., a leading Bay Area affordable housing developer, to help it. Since1983, the year it was founded, Bridge has participated in the development of more than 13,000 affordable homes.
Tod Spieker of Spieker Companies in Palo Alto, which owns 2,600 apartment units in San Mateo and Santa Clara counties, said before the trustee sale that he would be surprised were anyone to step forward to buy the East Palo Alto portfolio en masse. He noted that his portfolio, acquired over 32 years and roughly the size of the one sold, amounts to nearly 1 percent of the total apartment stock in the two counties, “so you are talking about buying a huge business.”
There is no denying the quality of the Page Mill properties’ location, he said. “Geographically, it is ground zero. You look at a map of the Bay Area, and it is nearly right in the center, and there is great connectivity north to south and east to west.”
Still, he said, East Palo Alto can be a difficult place for apartment owners to do business, including having to contend with local rent-controls. “The politics is very intense,” he said. “Everything has a price, but it makes me look extra hard.”
