Privately held Pasquinelli was listed the nation's 24th-largest builder on Builder's 2007 Builder 100 list with 2,974 closings in 2007, a drop of 21% from the previous year. Revenue was reported at $613 million, down from $825 million in 2006.
Ailing Writeup, 2008-08-27
We have been hearing rumblings about development foreclosures on Pasquinelli Homes, and noted this August 23rd Courier News article about one of them—Tuscany Woods Phase One, outside Chicago. From the article:
Village Attorney Mark Schuster said Park National Bank of Oak Park has started "a foreclosure proceeding" in the 16th Circuit Court in Geneva, with the intention of taking over the development. He said a hearing was held Thursday and another has been scheduled for Sept. 19.
Schuster said bank officials told him they have hired a builder to finish homes that already have been sold but not built, or that are partially finished.
The court action applies only to Phase One, which consists of about half of the development's 409 acres and 342 of the total 540 homes and townhomes planned. Phase One had been owned by a corporation named Pasquinelli-Tuscany Woods LLC, a branch of the larger Pasquinelli organization.
We've also heard rumors similar things are happening to Pasquinelli in Flordia, Texas, and South Carolina, to name a few. No confirmation on thos yet.
Rumor is that the new dev in Plano lost its funding....they stopped building and the sales agent are no longer in the model homes selling. Interestingly enough, they have been showing the inventory homes.....not sure what the deal is...if Pasquilini is going out of business.... Permalink
It has been confirmed that they have shut down a few projects in the Dallas area. They are behind on paying their sales people on closings and it appears that of the approx. 13 communities in the Chicago they are batting 0 for the last three months. The way I understand it is that each project is set up with a different set of banks. Some are not working with Pasquinelli and the rest are under negotiations. It does not look good. Reminds me of the S&L debacle in the 80's. Stay in touch.
I was scheduled to close on my Pasquinelli townhome in Irving next week, and was scheduled for my final walk thru today. I was told by my sales guy that they may be losing funding, therefore my deal may fall through. My closing in on hold indefinitely, as is my walk thru. He's concerned about losing his job.
What I don't get is why would they throw away a deal on a BUILT townhome that has definitive money coming? How does this work??? Is there any hope for me getting in this place? I HAVE to move out of my current home the weekend of the 19th... I'm definitely in panic mode. Can anyone provide more info on this?
twarden1 - I am sorry to hear that. That is reallyawful. It sounds like they do not have any money to pay their piece of the closing...and the sales agents commission. I think their partnership with Wells Fargo ended. I live in the Briarhill estates in Plano. They are finished with one building except for the grass for front lawn...back lawn done....I also met the people who purchased the house....and they still have the foundation built for another building but havent been back in 2 weeks...the portapotties are still out there. It's pretty bad. Eventually the bank will get a hold of the development and finish the houses that have been started....unless Pasquinelli is working on getting some more funding...this is crazy because the homes were selling...not like hot potatoes but people were buying.....
There is a Portrait office in Plano off of Legacy I think. I might try to go past there after work to see if anyone is there. I dont think the company has gone out of business, they just don't have any money to build and sell more homes :-: Permalink
Okay, I'm not sure how this effects all Pasquillinis developments but talked to an employee in the Portrait office in Plano....yes, there were people there and furniture...I was afraid I will be greeted with a boarded up lobby with no furniture. Any way, she told me they are negotiating with banks for financing...I think the deal is the partnership they had with Wells Fargo dissolved and now they need to set up another such deal. Wiki says that PCM company that I got my mortgage through is/was a partnership with Wells Fargo and Portrait. Permalink
Well, I'm still working with PCM (which yes, is part of Wells Fargo) and there doesn't seem to be any issue there. But that's on the mortgage side. It's the banks that are funding the building of the communities that are the problem. They may be Wells Fargo too, but my guy said something about Bank of America... so that part is a bit foggy.
I went by the Portrait location in Irving yesterday after work and the mgr there explained basically that the Portrait in Chicago can't pay their bills. The bank funding the Chicago Portrait is also funding some or all of the Dallas projects. As I understood it, this bank is trying to take money from the Dallas locations to pay for the Chicago debts because Dallas is basically doing just fine. Portrait said "no" you can't have ALL our Dallas money (but said they're willing to give up their profits, after their bills are paid). So the bank has locked everything up. And I believe you're right, they're trying to find new funding.
So we are left as pawns in their corporate game. While there's no guarantee that the Dallas locations won't be foreclosed - I found this information to be mildly encouraging. My contact said that they have 50 contracts ready to close this month. At approximately $200k per unit, that's $10 million dollars they're going to throw away if they shut down these projects before letting the contracts close. That's just stupid. Not to mention, there's nothing to build in my unit and 4 others that are finished. We're just twiddling our thumbs waiting to close and move in!
My impression is that we just have to sit and wait. We could find out today, tomorrow, a week from now, longer... who knows. In the meantime, the house I'm living in and selling is closing next week and now I get to move all my crap into storage and stay with friends while Portrait and their bank work out their BS. That also means I get to move twice which is a real party... not to mention the extra expenses of renting a U-Haul TWICE instead of once, the cost of a storage unit, rent to stay at my friends, etc. The lock on my rate also expires on the 18th. GRRRR! I have a refrigerator scheduled to be delivered to my Portrait townhouse on the 25th, Verizon was supposed to install FiOs internet and phone on the 22nd, my satellite TV was scheduled to do an installation on the 21st. So this definitely throws a huge wrench into my plans.
Let me know if you guys hear anything more, and/or correct me if I've miscommunicated something. I'll do the same. And keep in mind that I'm merely passing on what was told to me by a Portrait sales mgr. Permalink
Note: Comments may take a few minutes to show up on this page. If you go to the forum thread, however, you can see them immediately.
Important: This company is on our list of builder operations that have "imploded" (see also ailing lenders). This is a somewhat subjective call, and does not necessarily mean total shutdown or bankruptcy. It can also mean steep and rapid declines in enterprise value; or abnormal "bail-out" by corporate parents or peers in order to continue to operate. The builders may be residential or commercial.