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American Equities properties appear in real estate auction

First round of receivership liquidation is underway

By , Columbian business reporter
Published: November 6, 2019, 6:05am
7 Photos
One of four Clark County properties up for auction as part of the receivership of the American Equities mortgage funds, is pictured along N.E. Lewisville Highway in Battle Ground on Nov. 4. The other properties are undeveloped. (Alisha Jucevic/The Columbian)
One of four Clark County properties up for auction as part of the receivership of the American Equities mortgage funds, is pictured along N.E. Lewisville Highway in Battle Ground on Nov. 4. The other properties are undeveloped. (Alisha Jucevic/The Columbian) Photo Gallery

The receivership process for the 15 insolvent American Equities mortgage funds is slowly trudging along, but one clear sign of progress can be seen in the pages of this season’s Realty Marketing/Northwest auction catalog, where several former mortgage fund properties have found their way into the lineup.

“We have 35 of the properties (from the mortgage funds) in our fall auction that range from Washington down to California,” said Reality Marketing/Northwest President John Rosenthal.

Twenty-four of those are in Oregon or Southwest Washington, he said, including four in Clark County and one just outside the county in Woodland. Sealed bids are due by 5 p.m. Nov. 13. More information about the auction can be obtained by calling the company office at 800-845-3524.

The 15 insolvent funds — all of which are named some variation of “American Eagle Mortgage,” e.g. American Eagle Mortgage 100, American Eagle Mortgage 200, etc. — were placed into receivership earlier this year.

American Equities operated the mortgage pools for years as vehicles for investors, many of whom were local to Clark County. At the time the insolvency became known, the funds held an estimated $34 million in assets against about $77 million in liabilities.

Portland-based accounting firm Hamstreet and Associates was tasked with performing a full review of the funds’ financial records and property assets and developing a plan, subject to approval in Clark County Superior Court, to liquidate the assets and recapture as much value as possible to pay back investors.

Hamstreet hired Realty Marketing/Northwest to auction off the properties, Rosenthal said. The two companies have previously collaborated on other liquidations, he said, but the scale of the American Equities case is larger than most.

“It’s an unusual collection, that’s all I can tell you,” he said.

The Woodland property and three of the four Clark County properties are undeveloped. They range in size from 4,174 square feet to about 5 acres.

The only developed property is off of state Highway 503 north of Battle Ground, featuring a 2,176-square-foot commercial building built in 1903. The building currently has a tenant, Rosenthal said, but the lease is month-to-month.

One of the properties doesn’t have a reserve price, while the rest range from $50,000 to $495,000.

“The reserve prices are the numbers that have been approved by the court,” Rosenthal said. Hamstreet isn’t allowed to accept bids below the reserve without permission.

The most expensive parcel in the entire 35-property receivership portfolio is a 4-acre commercial development site on Old Pacific Highway in Woodland, about half a mile south of Exit 22 from Interstate 5.

“The Woodland property is the prime development property,” Rosenthal said.

The catalog’s lineup of former American Equities properties also includes a 1,000-square-foot floating home at a marina on Northeast Marine Drive in Portland, and the former Chinook Inn in the Columbia River Gorge in Corbett, Ore.

The receivership portfolio also features a mix of developable and home sites in Washougal, Longview, Oceanside, Port Orchard and Goldendale, in the Oregon cities of St. Helens, Lincoln City, Depoe Bay, Waldport, Boardman and Roseburg, and at several locations along the Sandy River.

The properties in the catalog do not represent the totality of the mortgage funds’ assets. In past updates to investors, Hamstreet has repeatedly stated that some of the pools held loans secured by property in Mexico, which presents more of a challenge to secure and liquidate.

One recent update included a list of 14 identified properties in Mexico, several of which are described as being located in the resort city of Cabo San Lucas or other parts of Baja California Sur, in the southern half of the peninsula.

Hamstreet has been working through a legal process to consolidate the 15 different mortgage pools into a single estate, which the company said is necessary because American Equities operated the funds as essentially a single entity, comingling money and assets in a way that would be “not feasible or cost-effective to unwind.”

“The most fair and equitable remedy in these circumstances is to consolidate the estates so as to create a common fund from which investors in all of the pools can participate,” the company wrote in a motion filed in October.

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