Eight small shopping center properties in Metro Orlando are in states of foreclosure or lender liquidation, the newest among them being Ocoee's West Oaks Square, according to the latest monthly data from Trepp LLC, which analyzes commercial mortgage-backed securities, commercial real estate and banking industries.
Orlando delinquencies of more than 90 days totaled 14 at the end of June, including three office and three multi-family residential properties, per Trepp's data.
The latest property on the list to enter real estate-owned (REO) status was West Oaks Square retail plaza, located at 9470 W. Colonial Dr. in Ocoee, with $4.16 million owed. Boasting nearly 20,000 square feet in space, the property currently has just over 4,200 square feet vacant between two suites.
REO is when a lender takes back ownership of a property from a borrower and is holding it on its own books. West Oaks Square is now controlled by Keybank National Association of Overland Park, Kansas.
Other retail properties in REO status include:
-- Lake Olympia Square (1501 E. Silver Star Rd. in Ocoee), with a $9.5 million loan balance controlled by Starwood Capital, by way of Starwood Property Trust and Starwood Capital Group's 2013 acquisition of Miami Beach-based LNR Property LLC. LNR is the special servicer for this property and is the world's largest commercial special servicer;
-- Columbia Promenade (1251-1263 W. Columbia Ave. in Kissimmee), with an $8.7 million loan balance, is a 65,000-square-foot shopping center anchored by Publix and located at the intersection of John Young Parkway and Columbia Avenue;
-- Bridgewater Marketplace (13200 E. Colonial Dr. in Orlando), with a $6.5 million loan balance, is also controlled by Starwood Capital's LNR Property;
-- Silver Pines Shopping Center (5300 Silver Star Road in Ocoee), with a $6.16 million loan balance, acquired in April by lender CW Capital Asset Management out of Bethesda, Md., for $17,957;
-- Lakeview Plaza (2310 Fortune Road in Kissimmee), with a $4.8 million loan balance, also controlled by Starwood Capital's LNR Property;
-- Silver Hill Shopping Center (2702 Pine Hills Road in Orlando), with a $4.1 million loan balance, also controlled by Starwood Capital's LNR Property;
-- Shoppes of Southland (7400 Southland Blvd. in Orlando), with a $2.7 million loan balance, also controlled by Starwood Capital's LNR Property;
Metro Orlando's largest delinquent loan remains Victoria Place Apartments at 12612 Victoria Place Circle in Orlando, with a balance of $44.07 million. It's also in REO status and controlled by CW Capital Asset Management, which declined to comment on Monday for this story. The property's value was assessed at $36.1 million by the Orange County Property Appraiser last year.
CW Capital Asset Management also controls Semoran North Apartments in Winter Park (also known as Andover at Winter Park), in REO status with a $21.5 million loan balance.
Eola Park Center, located in downtown at 200 E. Robinson St., ranked second among Orlando delinquencies with $27.65 million in loan balance, and remains listed as 90-plus days delinquent. Its owner, Raleigh-based Highwoods Properties, did not return calls for comment on Monday.
The 14-story Eola Park Center, acquired in May 2007 for $33.1 million, was most recently assessed by the county at $15.1 million. It faces a favorable resale market for downtown, with the 21-story Regions Bank Tower selling in May for $51 million, and the 23-story Wells Fargo Tower drawing $34.7 million in July 2014.
Among office buildings, Oakridge Office Park (1500-1636 Oak Ridge Road & 5815-6031 Rio Grande Ave.) is in foreclosure with $15.74 million in loan balance. West Orange Professional Center (10125, 10131 W. Colonial Dr.) is also in foreclosure with a loan balance of $4.08 million.
Investors that want to pursue distressed properties can contact the lender and offer to buy the note, or contact the borrower and offer to jointly offer the lender a discounted take-down, said R. Scott Shuker, bankruptcy partner at Latham, Shuker, Eden & Beaudine, LLP.
"Speculators in this market are usually 'loan-to-own' folks, meaning they'll buy the loan at a discount so they can then foreclose, and then own the property," he said.
Metro Orlando's commercial real estate delinquency rate in June was 3.77 percent, down from 5.7 percent in June 2014, while the national rate was 5.45 percent, said Sean Barrie, research analyst with Trepp.
"A basis point drop of 200 is pretty significant, (Orlando is) in the upper-crest of advanced drops in metro markets nationwide," said Barrie, who emphasized that opportunity in the Orlando area to acquire distressed assets requires intense due diligence.
"You want to see how the market is doing as a whole and where the property fits into the flow of that market," he said. "Improvements may be needed on the property that are not stated by the servicer, tenant lease information as well; all that factors into someone doing their due diligence on these properties."
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