The Longwood Towers complex in Brookline is being seized by its mortgage holder, which said it plans to complete its conversion from apartments to luxury condominiums.
IStar Financial Inc. said in statement yesterday that it started foreclosure proceedings on the project and has scheduled a May 8 auction, when it plans to take possession of the property. IStar Financial, based in Manhattan, declined to discuss the complex transaction.
The Tudor-inspired complex had been purchased in 2005 for $105 million by the Radco Cos. of Atlanta and its investment partner Arcapita Inc., an investment bank with offices in Bahrain and Atlanta. The pair launched a $30 million renovation of the complex with plans to sell the 277 units as condos.
But the developers had poor timing. A real estate agent familiar with the renovation who did not want to be identified said the listings hit the market in early 2006, just as Boston's housing market was heading into a steep decline, and condo sales were slow.
Radco pulled out of the deal at some point, IStar said in a statement, and then Arcapita "decided that it could no longer fund the project as planned and entered into discussions to transition the asset to iStar's control." Arcapita and Radco could not be reached for comment.
IStar first took over Longwood's mortgage as part of its deal to acquire a real estate loan portfolio from Fremont Investment & Loan, a subprime mortgage company that originally provided the financing.
IStar said it plans to bid on the 1924 property at its own foreclosure auction, because it wants to complete the conversion of the property, which it called "the finest landmark architecture." The auction "will speed completion of the renovations," iStar said.
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