The fate of 14 Illinois communities--representing more than 2,200 lots, plus standing and partially constructed inventory--as well as one community in Colorado and five in Michigan, could be determined soon, as the bid consideration phase of the bulk of Neumann Homes' assets is set to close on June 26.

But it seems that the question in the market, which is quickly becoming flush with a plethora of available assets, is along the lines of: What if I threw a party and nobody came?

Chicago is dominated by Lennar, D.R. Horton, and K. Hovnanian's Town & Country. But it wasn't always a public paradigm.

As noted in an article from BusinessWeek magazine, Neumann Homes was once the 35th-largest builder in the country and a major force in the Windy City.

But, much like other Chicago-market home building institutions such as Kennedy Homes, Lakewood Homes, and even, to some extent, Kimball Hill Homes, Neumann suffered at the hands of public home builders that entered the market and bid land prices up in an effort to capture an increased share.

Once active in the inner rings, Neumann was pushed out to the far-flung suburbs in order to keep price points competitive and to secure large enough tracts to develop on a scale that would meet its goals for increased volume. Despite the distances from Chicago's coveted Loop, sales remained hot in successful communities like the Clublands of Joliet.

Hoping to replicate the success and glean more sales in 2004's sizzling market, Neumann opened a copy-cat version so far north of the city proper that it was virtually on the border of Wisconsin. Dubbed the Clublands of Antioch, 995 units were planned.

Just prior to Neumann's filing for Chapter 11 bankruptcy protection last year, the community registered 291 of the homes in the Clublands as closed, according to statistics provided by Hanley Wood Market Intelligence (HWMI). Today, it's referred to as the Ghostlands of Antioch after a recent firesale in the model homes had people walking throughout the community carting everything from bedframes to draperies that they had acquired in a liquidation of the assets.

Now, sources in the market wonder if a willing buyer will lay claim to the land assets so easily--especially since Chicago is seeing more and more options to choose from. "With the amount of land coming on the market, I'd be licking my chops if I were a vulture fund," Buz Hoffman, president of Lakewood Homes, told Big Builder.

Because the assets are still in their bid consideration phase, representatives of the asset-trading firm that's handling the deal, Hilco Real Estate--a subsidiary of the Hilco Trading Co.--wouldn't comment on the bidding activity at this point other than that, "We'd like to find a buyer for every asset."

Though no one we spoke too could point to a Neumann "A" property, several were deemed a B+ including one community in Sugar Grove, the Southbury community in Oswego--where Orleans is said to be interested in acquiring the Nuemann land position--and also a Grayslake community, where a commuter rail station adds value.

Outside of those, its anyone's guess.

All the Neumann assets in this portfolio are entitled, according to Mike Hart, an HWMI regional manager for the Midwest. "The utilities are in play for many of them," he said. "In fact, in every Chicago area, they have already started building. It's just flipping a switch to get it going."

But while that might hold some appeal for a strategic buyer, such as another home builder looking to increase its presence in the market, most sources think any interested party is likely to be financial.

Therein lies the rub: While it makes sense on the surface for investors to consider holding plats and later selling, or as an entree for smaller players looking for a foothold, the entitlements on a property still have a shelf life to consider, noted Lance Ramella, principal with Meyers Builder Advisors. "If you want to buy and go long on land, lots and partially finished inventory are not going to be the way you would go," he said.

Many of the Neumann transactions are very complicated deals, according to sources close to the matter. Because these developments are built on years of negotiations related to infrastructure, there are service areas to consider, recapture agreements to honor, and a lot of outstanding issues (read: risk) to be factored into the assumptions.

In any case, what's clear is that master planned community sales are more collaborative than a typical auction dispersal might be. "Some of these are essentially villages, and there was never the intention for development to stop," noted a source who requested anominity.

The Antioch project is by far the most complex of the Neumann assets, and it was handled as a special asset outside of the bulk portfolio. Originally, bids were set to close at the end of May, but Hilco extended the close to June 6--likely because the project contained so many outstanding complications that needed to be articulated.

But Hilco, which is also handling a portfolio of Levitt assets, seems to be up to the challenges.

The company has worked in the industrial and commercial market sectors, as well as with major retailers. It even has experience with the WorldCom bankruptcy case. And if its track record for honing in on opportunistic industries stands for anything, the company will soon likely be assisting another home builder near you.

"Being a specialist in distressed assets, we found [residential real estate] to be a natural progression for the company," said Richard Kaye, executive vice president and head of marketing for The Hilco Organization. "We have our traction now and are very active and very busy helping monetize builders and developers in distressed situations."

As always, there is plenty to talk about. Please e-mail me at with your insights on these or other current issues.

In the meantime, here's a look at what's happening in the trenches:

FLORIDA Serving as advisers to the FDIC, Nautilus Capital LLC and GlassRatner Advisory and Capital Group LLC completed the structured liquidation of a residential construction loan portfolio of NetBank Inc. The portfolio consists of approximately $145 million in both performing and nonperforming first- and second-lien construction loans. Approximately 80% of loans in the portfolio are located in Florida, but the portfolio includes properties in 17 other states.

SOUTHERN CALIFORNIA The builder of the proposed 5,000-plus home Las Lomas development in the Newhall Pass area sued the city to restart the project and asked for $100 million in damages. The Las Lomas Land Co. alleges in the lawsuit, filed Monday in Los Angeles Superior Court, that the city stopped reviewing the project in March for "arbitrary, discriminatory, and illegitimate reasons."

Learn more about markets featured in this article: Chicago, IL, Los Angeles, CA.