This Month’s Special: 58% Off Greenvest Land in Loudoun

Vienna-based Greenvest LC used to own 4100 acres in the Dulles South area of Loudoun County. That all changed two days ago when the land, valued by some at $165 million, was auctioned for $69 million.

iStar Financial, the company that originally lent Greentvest $130 million for the land, foreclosed on the land. The land was auctioned off this past Tuesday at the Leesburg courthouse steps.

The winning bidder?

iStar Financial (they sure love spending money, don’t they?)

What led to the foreclosure auction?

Greenvest was hoping to have the land subdivided into four communities — Greenfields, Lena, Broad Run Village and Arcola. But the public outcry against further intercounty development and the congestion that would come along with it led to the county denying requests to rezone the land. And that left the development dead in its tracks.

Last year, Greenvest tried to sell 100 of those acres to the Loudoun County school system, which wanted the land for future schools. The Loudoun School Board rejected the idea over concerns that the $20 million price tage was too high.

With no chance of moving forward with the development, Greenvest defaulted on its $130 million loan. That led to foreclosure proceedings, Tuesday’s auction and iStar Financial, the company that originally lent Greenvest the $130 million, buying the land back for $69 million.

What now?

iStar Financial will try to sell the land in order to recoup some of the money lost (and spent) throughout this whole ordeal. But they face some serious hurdles:

• previous requests to rezone the land have been denied
• tightened lending/financing guidelines
• a weak local and national economy
• increased proffers (click here for more on that)

On a related note, the $165 million valuation seems to have come from Loudoun County itself – probably for tax revenue purposes – and is most likely not the land’s true market value (just look how much it actually sold for at the auction).

At $16,829 per acre, it may seem like quite a bargain. But it may be a while before iStar sees a return on their purchase. As one real estate developer who attended the auction said, “I don’t buy green bananas.”