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New Brunswick Development in Trouble

Posted on 01 April, 2016 in Real Estate Development

In 2005 one of the most anticipated real estate development projects in New Jersey by DEVCO was the development of The Heldrich, a 235-bed hotel and conference center located in New Brunswick, NJ. While the project was expected to do very well, the development and opening of the project ended up being timed poorly as it opened right around the time of the economic collapse.

Along with the collapse of the global and national economy, the hotel and conference industry struggled, and the Heldrich was not an exception. While it was expected to attract very large conferences and have a high occupancy, it has not been successful in getting the top attractions and the property has averaged no more than 65 percent occupancy.

Due to the low occupancy, the owners of the property have struggled to pay their loan and bond payments back. This past week the owners of the project defaulted on a $20 million CRDA loan, which was provided by bondholders through the Middlesex Country Improvement Authority. While the senior bond holders have been repaid, this level of debt is going to continue to be in default.

 

One Response to “New Brunswick Development in Trouble”

  1. Jean Teslim says:

    While the project has struggled, the owners are confident that it will become viable in the near future. Once the debt is repaid, there will be significant excess cash flow, which can then be repaid to any outstanding bond holders. The superior papers writing services has also announced that they will be quieting ties with these ones too.