Las Vegas Sun

February 12, 2012

Currently: 53° | Complete forecast | Log in

Economy hurts Vestin real estate lenders in second quarter

By Steve Green (contact)

Monday, Aug. 16, 2010 | 10:33 a.m.

Sun Coverage

The battered economy fueled additional losses during the second quarter at three of the Vestin real estate lending businesses in Las Vegas.

The companies are headed by longtime hard-money real estate lender Michael Shustek, who pools investors' funds for lending to real estate developers.

Loans in this industry are typically riskier than standard commercial bank loans and carry higher interest rates.

Vestin Fund III LLC on Friday posted a loss for the quarter of $251,000, an improvement from the loss a year earlier of $1.281 million.

Of its eight real estate loans, which had a total balance of $3.6 million, three totaling $2.5 million were listed as nonperforming at June 30 and may be headed toward foreclosure, Vestin said in its earnings filing.

Non-performing assets, after accounting for allowances for loan losses already booked, totaled $2.2 million or 44 percent of total assets as of June 30 vs. $2.8 million or 39 percent on Dec. 31.

"We believe that the significant increase in the level of our non-performing assets is a direct result of the deterioration of the economy and credit markets. As the economy weakened and credit became more difficult to obtain, many of our borrowers who develop and sell commercial real estate projects have been unable to complete their projects, obtain takeout financing or have been otherwise adversely impacted," Vestin said in its filing.

Also posting second quarter losses, today, were Vestin Realty Mortgage I ($643,000 lost v. $3.2 million lost one year ago) and Vestin Realty Mortgage II ($6.17 million lost vs. $14.52 lost one year ago).

Vestin Realty Mortgage I said that of its real estate portfolio of 19 loans valued at $32.3 million, eight owing $19 million were nonperforming.

For Vestin Realty Mortgage II, of 23 loans with a total balance of $85.4 million, nine owing $49.6 million were nonperforming.

Discussion: comments so far…

Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.

Only trusted comments are displayed on this page. Untrusted comments have expired from this story.

No trusted comments have been posted.

Post a comment

Commenting requires registration.

Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy.

If you would like to submit your comment as a letter to the editor, you may submit it here.

Most Popular

  • Viewed
  • Discussed
  • E-mailed
  • Facebook