Home News Case Studies Apartment Complex in Canton, MI
The collateral was comprised of a 744-unit Class C garden and townhouse style apartment complex in Canton, MI, in suburban Detroit. The loan transferred to special servicing in September 2010 due to monetary default. After borrower bankruptcy filings were dismissed, the Trust gained title through foreclosure in December 2011.
Sold for $53.3 Million
Resulting in a 100% recovery to the trust.
Scope of Work
At foreclosure, the property was only 68% occupied with significant delinquency and deferred maintenance. Issues included roof leaks, collapsing balconies, crumbling exterior walls, missing siding, non-functional amenities and 38 units damaged by a fire in 2009, plus a multitude of city code violations. The city was threatening to shut down the property for failure to correct code violations.
After foreclosure, approximately $5 million in capital repairs were completed to correct city code violations. Additional capital was subsequently spent to bring fire units online, to address damage from a large flood that occurred in 2014, and to improve property amenities. In all, $13 million in capital was spent correcting deferred maintenance items and bringing the property up to the market standard.
CWCAM successfully implemented a revenue management system to increase rents, created additional revenue streams through utility bill-backs, laundry contracts and renting basement storage units. Additional savings were achieved through tight budgetary control and cost savings techniques. Occupancy was increased to 95% with less than 2% delinquency.
CWCAM was able to increase NOI from $0.7 million for year-end 2012 to $3.6 million for year-end 2016.
The asset sold for $53.3 million in February 2017. The successful sale of this asset achieved full recovery to the bondholders of the Trust.