Luxury Real Estate Developer files for bankruptcy protection

Palmetto Bluff developer files Chapter 11

Another luxury real estate developer has announced it is filing chapter 11 bankruptcy protection. Crescent resources – jointly owned by Morgan Stanley and Duke energy – has announced it will file chapter 11. Duke has guaranteed $70 million worth of loans, and the company statement said there would be “minimal impact,” on existing projects, which include Palmetto Bluff, a luxury vacation home development in South Carolina. The current CEO will be replaced and the company is working on refinancing outstanding loans.

This is the latest in a long line of luxury developers unable to meet existing loan repayments and the number of loan defaults in the sector continues to rise. Palmetto is not quite so high profile as the recently bankrupt Yellowstone luxury residence club. Other high profile delinquencies recently include Trump entertainment, Magic Johnson’s “110Green St development,” John Laing homes, (owned by Emaar, the Dubai government-owned developer,) and of course, the Tamarack ski resort, which managed the dubious distinction of going broke in just one year. One does wonder just how many of the developers will be left standing by the time the Fed has stopped printing money.