Financially Troubled StoryBuilt Looks To Unload $2B Portfolio In Receivership Sale
An Austin, Texas-based infill housing developer is putting its 28-property project portfolio on the market in a receivership sale as it faces a series of financial challenges.
StoryBuilt has 28 projects in various stages of development throughout Austin, Dallas, Denver and Seattle, according to a news release.
Founded in 2009, StoryBuilt targeted “cool neighborhoods,” then built dense, contemporary projects to add more vibrancy, according to the release from A&G Real Estate Partners. A&G Real Estate Partners and Onyx Asset Advisors are handling the receivership sale.
The properties range from seven to more than 800 units. Seventeen of the projects are in Austin, including residential and mixed-use developments, according to the news release. Austin properties include Thornton Flats, an apartment complex in the South Lamar area, and George, a condo complex in Central Austin that plans to start closing sales in the fourth quarter, according to its website.
The portfolio includes at least seven partially completed projects and three lots that have been approved for development but haven't moved into construction. Though the news release only specifies one lot in the Denver area approved for 55 townhomes, the Denver Business Journal reported in July that StoryBuilt hadn't started construction on any of its three announced projects there.
Buyers can purchase the roughly $2B in assets separately or as a whole.
Trouble has been brewing for StoryBuilt since at least July, when the company sent a letter to investors noting a “lack of liquidity” and requesting $10M in rescue funds, the Austin Business Journal reported. Later that month, another letter notified investors that it was furloughing much of its staff and reorganizing its leadership.
"As you are aware, StoryBuilt has recently struggled with focused growth, reporting/financial controls and liquidity," StoryBuilt co-founder Anthony Siela wrote in that letter, according to the ABJ. "This has materially affected our performance as a business and our partners."
In August, the ABJ obtained letters to StoryBuilt staff notifying them that 137 employees would be laid off with less than 60 days’ notice.
The 60 days’ notice “was not possible due to unforeseeable business and financial circumstances,” that letter said, per the ABJ.
“The Company was actively seeking funding to remedy the Company's cash flow issues and was anticipating recalling all furloughed employees to begin working again. The Company was unable to secure sufficient funding and is now going into a receivership.”
In late August, court-appointed receiver Stapleton Group asked the company’s investors for $2.5M, the Austin-American Statesman reported. The alternative to getting the $2.5M would be “financial Armageddon,” Stapleton Managing Director Mike Bergthold said on an August conference call, adding that a portion of the funds would be used to market the sale of the company as a whole or as individual properties.
Investors and residents are also suing StoryBuilt, which operates legally as PSW Real Estate LLC, the ABJ reported. Investors claim they are owed money, while residents have complained of construction defects and water penetration in their units, according to the lawsuits. Plaintiffs are seeking more than $1.5M total, the ABJ reported.
