Last week, a federal court in Pennsylvania named Rouse Chamberlin Ltd., an Exton, Pa.-based builder/developer, as a third-party receiver to market for sale 800 lots and houses that had been owned by DeLuca Enterprises, a builder based in Yardley, Pa.
Those properties are collateral for a $119 million loan DeLuca owed to a consortium of nine banks led by Wells Fargo, which had petitioned the court to assign a receiver after it determined that DeLuca was financially incapable of maintaining the properties during the selling period.
DeLuca Enterprises did not return phone calls from BUILDER requesting comment. The Philadelphia Business Journal reported on Friday that DeLuca had been attempting to sell this portfolio since last year after entering into a forbearance agreement with the banks. It defaulted on that agreement in December, and Wells Fargo sued the builder for repayment redress in April.
A spokesperson for DeLuca told the Journal that while the corporation has been reduced to a bare minimum size, it still has between eight and 10 projects in the works. Its website lists one active community: Garden Villas at Amberleigh in Gloucester, N.J. (DeLuca has not filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.) David England, president of Rouse Chamberlin, told BUILDER that DeLuca still retains deed to the properties in the portfolio being sold.
The portfolio that the federal court assigned to Rouse Chamberlin to sell consists of a varied mix of real estate within 22 projects that includes raw land, finished lots and houses in various stages of completion, says England. For example, one project in Orlando has 145 vacant lots and five completed homes; a second there has pads for six condo buildings. In contrast, another Orlando project has just two completed homes left to sell.
The Journal reported that the portfolio also includes a 220-unit age-restricted community in Winslow, N.J.; a 25-lot subdivision in Hilltown, Pa., with a handful of constructed spec homes; and a 36-lot single-family home community in Woolrich, N.J.
England says his company has already begun to offer the portfolio to buyers “on a project-by-project basis. There seems to be a fair amount of interest in the completed lots.” He said that the raw land is in “varied states of approval and entitlement.”
As a receiver, Rouse Chamberlin will need to deal with “a whole gamut on issues,” says England, which includes maintaining vacant lots while they’re for sale and keeping completed houses clean and in operating order. England also anticipates that his company will need to engage several constituencies—including townships and title companies—while the properties are being marketed. “It’s going to require a lot of education,” he says.
John Caulfield is senior editor for BUILDER magazine.
Learn more about markets featured in this article: Philadelphia, PA.