Fairfield Residential is bankrupt, files Chapter 11
This comes via the Wall Street Journal:
Fairfield Residential LLC, one of the nation’s largest apartment owners and developers, filed for bankruptcy on Sunday, the latest casualty of the turmoil engulfing the U.S. real-estate market.
Fairfield, which has built some 64,000 apartments, condominiums and off-campus student-housing units throughout the country, failed amid an inability to refinance debt or sell investment properties. That left the private San Diego, Calif., company with a litany of near-term maturities on debts related to various development projects and other investments.
Fairfield filed for Chapter 11 late Sunday afternoon in Delaware and listed assets of $958 million and liabilities of $834.9 million as of the end of September. In addition, Fairfield noted that many of its properties are worth less than their loan balances. That contributed toward putting Fairfield in violation of certain financial covenants with two main lenders: Wells Fargo & Co.’s Wachovia and Capmark Financial Group Inc., the big real-estate lender that recently filed for bankruptcy itself.
The article goes on to mention the very large CRE exposure that Morgan Stanley has. Lehman Brothers was another investment bank that had large exposure to commercial property.