ATLANTA — Atlanta-based Opus South Corp., a division of the Minnetonka, Minn.-based developer Opus Corp., has filed for Chapter 11 bankruptcy, along with some of its subsidiaries. The filing allows Opus South to financially restructure its operations and does not affect the company’s separate entities in the North, Northwest, East and West.
Employees in Opus South’s Atlanta and Tampa, Fla., offices currently are working on the disposition of assets, and the company will staff the offices with 25 employees until the disposition is complete.
“We are working on the wind down of operations for Opus South,” says Winston Hewitt of Opus Corp. “We are exiting the market.”
Officials at Opus South saw a dust up over commercial real estate on the horizon a few years ago and began anticipating a decline in the demand for construction. “We slowed development more than 2 years ago because we saw this coming,” Hewett says. “We’ve not experienced such a sharp decline in commercial real estate development or seen the complete shut down of capital and refinancing.”
In the next year, Hewett says that $324 million worth of loans Opus South has taken out with banks to finance construction will mature. This includes four loans for Florida condominiums totaling $103 million. Three of the four condominiums came online right after the housing bubble burst, and of the 330 total units, 228 remain unsold, Hewett says. Rising unemployment and a ballooning rate of foreclosure also placed a large burden on Opus South’s Florida projects.
“When you look at the combination of all these factors, it was really the perfect storm,” she says.
In its 28 years of operation, Opus South has developed more than 27.3 million square feet of office, industrial, retail and multifamily space. The company has delivered the 587,000-square-foot Social Security Administration Center in Birmingham, Ala.; the 352,983-square-foot Hartman Business Center in Atlanta; and the 230,000-square-foot Pensacola Civic Center in Pensacola, Fla. Among the firm’s condominium projects are the 93-unit 400 Beach Drive in St. Petersburg, Fla., and the 24-unit Sancerre Luxury Condominiums in Naples, Fla.
— Jon Ross