The failure of a rundown housing project in New Orleans to sell at auction, apparently because the expected minimum bid was too high, brings out some interesting points. As the below linked article shows, some officials are hopeful that a non-profit or organization with aspirations will take over. It will be interesting to see what effort is made for that to happen.
Now that it is obvious that the property is overpriced, it is not likely a non-profit or civic organization could justify the expense, which would not include the costs for repairs. The interesting part is what officials will (or won’t) do to potentially make a purchase happen. Would they reduce the price by one million or more dollars to facilitate a sale?
Or, will they hang on to the property in hopes that the value would somehow rise, along with the real estate market, and generate the hoped for revenue?
There is the matter of the $11 million loan default which created this situation. Obviously, the lender and others involved need to recoup as much revenue as possible. However, there is also the reality of today’s real estate market. This seems like a situation from which numerous parties need to work together to create a more realistic opportunity.
They have tenants in place living in less than ideal conditions, while the struggles negatively impact the surrounding neighborhood. It could be an opportunity for an organization or developer to be a hero.
Maybe it’s “cash for keys” and renovating or perhaps demolishing and starting over. Perhaps it is making a refinance arrangement which would make assuming the debt affordable to a developer or GC which could turn the property around. If entities work together, something like that could happen and, even if it takes years, could solve the problems. The property could sit there and the struggle could continue if not. An entity willing to get involved could be “first in” for a significant opportunity. It takes the ability to do so AND the willingness to get it done. Worth monitoring to see what happens.

















