House for Rental Units in Palo Alto Going Into Foreclosure
Approximately 1,800 house for rental units operated by Page Mill Properties in East Palo Alto, California will go into foreclosure if Page Mill fails to pay the $50 million due in August on its $250-million loan owed to Wachovia Bank, which was acquired by Wells Fargo Bank last year.
Page Mill was given 120 days to resolve its debt, based on documents filed by Wells Fargo with the Assessor’s Office of San Mateo County on September 25.
According to Wells Fargo spokesperson Elise Wilkinson, the bank has filed default notices on all of the apartment units and has warned Page Mill that unless it negotiates a new written agreement with Wells Fargo, all the apartment units will be foreclosed and sold off.
In September, a Superior Court Judge in San Mateo appointed David Wald as receiver and supervisor of the apartment buildings after Page Mill’s real estate management unit Woodland Park Management removed its staff from the complexes.
Wald hired Investors Property Services to manage the apartment units, partially addressing the concerns of tenants who have been worrying about the ownership of the house for rental units. Even before the foreclosure notices, tenant associations in properties operated by Page Mill throughout East Palo Alto have been filing complaints against Page Mill for raising their rents and for failing to maintain the apartment buildings.
Real estate analysts in the area said that Page Mill could negotiate a short sale, a loan-term extension or reduced interest rates, but some of them doubt the capability of Page Mill to raise the money to pay off its missed August payment.
Additionally, investors in multifamily properties in East Palo Alto have been long having difficulties because of the efforts of tenant associations and working-class families to control rents and maintain affordable housing throughout the city.
Investors who have huge plans of rehabilitating and improving apartment buildings and then raising rents are surprised to discover that they cannot just raise their rents without running into fierce opposition from the community.
For the November ballot, the city of East Palo Alto crafted a revised rent-control law to address loopholes in the current rent control law, but Page Mill was able to block the attempt.
Nonetheless, according to analysts, even if Page Mill has successfully blocked the planned revision of the rent control law, it may not be able to block the foreclosure proceedings by Wells Fargo and it may ultimately lose its power over house of rental units in the city.
