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Snowmass Bankruptcy Crystallizes Hypo Bank's U.S. Property Woes, BB

“It’s good news that there seems to be some path forward,” said a real estate broker whose offerings include a two-bedroom, two-bath penthouse for $1.25 million. “The truth is that this is a great opportunity for anyone who loves skiing. In the long run, this project will be awesome.”

ASPEN SNOWMASS REAL ESTATE - Snowmass Village, the Colorado ski town neighboring Aspen, got a lift in 2007 when Hypo Real Estate Holding AG agreed to arrange $520 million of loans to complete a $1 billion year-round resort. Three years later, construction has halted on parts of the 19-acre Base Village in Snowmass, where some buildings are wrapped in plastic, and Hypo has been seized by the German government. When the lender, whose 2009 implosion was Germany’s biggest bank failure since World War II, tried to foreclose on the developers in July, it was met by a countersuit that accused it of a “shameful repudiation” of its obligations.
The resort’s fate is a microcosm of all that has gone wrong for the bank as it handed out more than $8 billion to finance U.S. real estate projects during the property bubble. They include the Landmark, a luxury condominium and retail development near Denver, and a stalled hotel-condominium project in Phoenix. Hypo has taken control of both properties in the past 18 months, according to Real Capital Analytics.
By Jonathan Keehner and Oliver Suess, Aug 25, 2010 Bloomberg

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