The workouts have begun.

Comstock Homebuilding Cos., a small public builder based in Reston, Va., announced today that it has agreed to a $32.7 million workout with lender BB&T. The bank will foreclose on six communities in Atlanta and Virginia, including a Virginia condo project and single-family home developments in suburban Atlanta and Washington. The deal will relieve Comstock of nearly 23% of its $144 million in secured debt.

"As previously announced, we are working to restructure a significant portion of our debt to ensure our ability to survive what has turned out to be the worst cyclical market downturn in a generation. We are pleased with the results of our negotiation with BB&T and consider this an important first step in our plan to reposition Comstock to meet current market challenges," said Christopher Clemente, Comstock's CEO. "We continue to focus on similar negotiations with certain other lenders and remain optimistic regarding the outcome of those negotiations."

The housing downturn has not been kind to Comstock. So far this year, its auditors have expressed reservations that the company could continue as a "going concern," its stock was delisted from NASDAQ, and, according to its most recent financial report, its net new orders for the second quarter totaled only 20 units. That represents a dramatic drop in activity for Comstock, which closed nearly 900 homes in 2007, according to the BUILDER 100.

Alison Rice is senior editor, online, at BUILDER magazine.


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