MPS Real Estate, Stalled Condominium and Planned Unit Developments

By Brian Meltzer

During the first 12 years of our 15 years in business, MPS concentrated
our practice in the area of representing middle market businesses, with a niche
in representing homebuilders, commercial developers and condominium converters,
as well as financial institutions which made acquisition, development and
construction loans to real estate developers and builders.

In 2006, we saw problems developing in the housing market. By
2008, every one of our clients was running into serious problems with stalled
developments. It was like witnessing a slow motion train wreck with cars
teetering and then toppling off of a cliff. We realized that our core
businesses of representing homebuilders and construction lenders would change

As a relatively small, lean firm we pride ourselves on our
ability to quickly adjust to changes in the market and be on the cutting edge
of developing trends. By early 2007 we knew that for the foreseeable future the
real estate industry in the Chicago
area would be dominated by workouts, forbearance deals, deed in lieu
transactions, foreclosures and bankruptcies. We focused on preparing to
represent our clients in these areas with the same quality and creativity that
our principals displayed while representing
players in the real estate industry during the past 35+ years. Many of our
lawyers were deeply involved in the cyclic downturns and recoveries from the
mid 70s through the late 80s and had dealt with many of the problems and issues
that arise in declining real estate markets.

Through our extensive background and experience in assisting
developers to set up, develop and deal with issues facing condominium and
planned unit developments through housing cycles from the mid 70s through the
current downturn, we have the unique ability to analyze and advise lenders,
developers and investors on how to deal with busted condominium and PUD
projects that very few law firms of any size in the Chicago area have. 

Our experience with complex, mixed-use, for-sale
developments also puts us in a unique position to advise lenders, developers
and investors in how to deal with busted suburban projects with large amounts
of undeveloped or unbuilt areas and amenity packages that cannot be supported
by the homes that have been built and sold. We have represented lenders and
builders/borrowers in the negotiation and consummation of complicated deed in
lieu transactions with respect to large stalled 
housing developments in the suburbs and exurbs of Chicago. 

We currently represent six national homebuilder companies
with a presence in the Chicago area. 
These companies are actively seeking to acquire busted projects or
portions of busted projects at prices that will permit them to build and sell
homes at a profit in this continuing depressed market. We are able to quickly
and economically evaluate the legal structure of these projects and help the
builder determine if it makes sense to acquire them and what needs to be done
to minimize risk and maximize the likelihood of success.

We are also currently representing several investor entities
that have either acquired busted projects or who have acquired, or are in the
process of acquiring, notes from lenders at a discount with a plan to obtain
title to the underlying project through foreclosure or deed in lieu of

We expect that the depressed real estate market in the
Chicago area will continue for at least the next year.  However there are significant opportunities
out there for investors or builders.  MPS
can provide the experienced legal representation to help investors and builders
minimize risk and maximize upside potential.

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