The buyer of a failed condo-conversion project in north Reno doesn't expect to resume selling units in the 153-unit Talus Point complex for several years and maybe more.
But Sycamore Urban Properties, an Irvine, Calif., company formed in 2008 to purchase distressed properties such as Talus Point, ultimately expects that Talus Point will come back onto the market as condominiums.
The complex at 3970 Covington Way, just north of McCarran on the west side of North Virginia Street, was acquired by Sycamore Urban Properties from U.S. Bank for $4.225 million, Washoe County records show.
Talus Point was built in the mid-1970s. A California company bought the property for about $11 million in 2004 and started a condominium-conversion process before the real estate market collapsed. Today, 28 units are owned as condos and the other 125 are leased.
The original lender, California's PFF Bank and Trust, had foreclosed in 2009, and U.S. Bank ended up with the property through a transaction with the Federal Deposit Insurance Corp. after PFF failed.
That complicated history, combined with the project's mix of rental and condo units and the existence of a homeowners association on the property, meant that long-term financing was challenging, says Mitchell Bradford, president of Sycamore Urban Properties.
Pacific Western Bank provided the fixed-rate financing that allowed the sale to close. Scott Hardt, an executive vice president of the bank, noted that Sycamore Urban Properties has a successful track record in getting similar fractured condo projects throughout the West back on track.
He said the bank usually doesn't provide long-term financing for fractured condo projects.
Talus Point is the fifth stalled project acquired by Sycamore Urban Properties.
Bradford said the property has strong cash flow and historically high occupancy rates partly because it's near the University of Nevada, Reno. In addition, he said U.S. Bank had undertaken some improvements such as exterior painting and swimming pool repairs during the bank's nearly two years of ownership.
The bank was represented by Lance Faulstich of Trinity Commercial and Cory Edge of Edge Realty, both in Reno.
Edge said several other potential buyers had been spooked by the financial and operational challenges of a fractured condo project.
"Only Sycamore had the wherewithal to fully understand all the components of the deal, secure financing and ultimately close on schedule," he said.
The buyer was represented by Greg Rutten of GRu Ventures in San Diego, who said the buyer had been working since late last year to get the transaction together.
Bradford said Sycamore Urban Properties hopes to increase its presence in Nevada, and he said the company is actively searching for more acquisitions in the Reno area.
"We feel that Reno is just at the bottom, while some other markets have begun to recover," he said.
The rental units in Talus Point range from studios to three-bedroom townhomes.