COLORADO SPRINGS — Colorado Springs developer Ray O’Sullivan, whose plan to build downtown’s tallest building crumbled last year along with the economy, is losing several of his real estate holdings.
At least 10 properties owned by O’Sullivan or partnerships and limited liability companies that he was involved in are in foreclosure, and unpaid loans on the properties total nearly $19 million, according to El Paso County Public Trustee’s records. One of the properties includes O’Sullivan’s posh home in an exclusive Colorado Springs neighborhood.
“It’s the inevitable conclusion to the demise of the real estate business, particularly as it relates to land,” said O’Sullivan, who had successfully developed several residential and commercial projects in the Springs since 1990. He spoke from Phoenix, where he said he’s doing consulting work.
Public Trustee records show most of the properties are scheduled to be sold at foreclosure auctions before the end of the year; properties typically go unsold at such sales and are taken back by lenders.
As the economy collapsed last year, consumer demand slowed for new homes and retail purchases, and businesses delayed expansions or closed up shop. Some developers were left with vacant property, which stopped generating income or never started in the first place. When developers sought loan extensions or refinancings, lenders couldn’t or wouldn’t provide funding.
O’Sullivan was one of the developers who was hard hit. He closed his downtown office last summer and laid off his staff. By December, O’Sullivan said he couldn’t find buyers for his properties and expected to lose them.
O’Sullivan said he’s not in bankruptcy, but probably will be forced into it. Meanwhile, he said, Phoenix’s real estate market has suffered dramatically in recent years, but there are opportunities for investors who can take advantage of lower prices to position themselves for a turnaround. That’s what O’Sullivan and other developers did in Colorado Springs in the early 1990s after the nation’s savings and loan crisis and its last major real estate collapse.
“It’s really taking off here, but it’s under the radar screen,” O’Sullivan said.
Read details of some of the foreclosed properties at .
