Gladden Farms Lender to Sell Land?

The real estate meltdown has reached critical mass in my neck of the woods. I live up in Gladden Farms, a master-planned community in Marana, AZ (just NW of Tucson) and the lender for the undeveloped property has filed a notice of trustee's sale.

Below is an excerpt from the Arizona Daily Star:

    The lender for master-planned Gladden Farms in Marana has filed a notice of trustee's sale for about 605 acres, most of which is vacant farmland just east of the development.
The notice filed last month by a division of GMAC Bank also includes a small portion of subdivided but undeveloped lots, but the action is not expected to affect current Gladden Farms homeowners.

   Dean Wingert, senior vice president for Gladden Farms, said in a prepared statement the project's developer and owners have a long-standing relationship with GMAC, but problems arose following a recent appraisal of the vacant land.

   Lenders can sell property through a trustee's sale when a borrower is in default or foreclosure. Though full details of what precipitated the Gladden Farms sale were not immediately available, a drop in equity based on falling appraised values can trigger default provisions.

   "They did an updated appraisal of the vacant land, and it came back with a very low value on today's conditions," Wingert said.

   Gladden Farms acquired the land in 2005. It sits just east of the master-planned community between Tangerine and Moore Roads. The notice of sale will have no effect on the existing development, Wingert said.

   For the last five months GMAC has not paid for any of Gladden Farm's expenses, so the developer has gone ahead on its own with $2 million in improvements to the site and also made a major payment to the town of Marana, Wingert said. Because of that commitment, Wingert said he expects the developer to find new financing before a trustee's sale occurs.

I've also received a letter in the mail regarding this issue, and I sure hope that Gladden Farms can get this sorted out. A Fry's shopping center has been on hold for the past year and a half (already bladed and utilities run) and if the land does go up for auction I imagine it would take even longer.

It sounds as though Gladden Farms management is optimistic about finding a new lender, however, so we'll just have to see what happens.