DWC LAGUNA BEACH RECEIVERSHIP FEATURES COMPLEX PORTFOLIO Douglas Wilson Companies
Complex real estate assignment comes to close After serving for many months as receiver for a complex and highly unusual property portfolio in and around Laguna Beach, California, DWC’s assignment is nearing its close. At times a challenging case with many stakeholders invested in the properties, the scenario originated in 2018 with a $195 million loan secured by 18 properties in Orange County — with most locations concentrated in the artsy, coastal Laguna Beach community. The nature of the properties made the portfolio a complex one. The 18 properties comprised many different asset types: a boutique hotel, a large multifamily community in Redlands, Calif., vacation rental homes and event
spaces, and commercial and retail office spaces, to name a few. Many of the properties were redevelopment opportunities for the owner, who took out the original loan from a debt fund prior to the pandemic, at a time when access to capital was abundant. At the time the court appointed Douglas Wilson Chairman and CEO Douglas Wilson as receiver, the loan balance was roughly $140 million. “We stepped in as quickly and efficiently as possible to control the 18 properties,” Wilson says. “This included back taxes and outstanding debt for a vast array of property types, most of which were held in separate LLCs.” The case experienced several twists, with a second lender emerging under the original ownership, agreeing to
purchase the loan in default, preserving the properties temporarily and extending the receivership. Soon after, yet another lender purchased the loan, adding complexity to the case. Ultimately, DWC applied the firm’s vast experience in real estate types in order to preserve the value and maintain the entitlements of the individual properties in a precarious market environment. “With each property held in a separate ownership structure, the assignment had an usual layer of complexity,” says DWC Vice President Ryan Baker. “DWC’s intimate knowledge of real estate operations and entitlements enabled our team to stabilize the portfolio. This meant treating the properties as separate and establishing an accounting system for each entity — depending on the unique needs of each one.”
