Developer John Ryan’s home sites in Tampa, Florida are under various stages of foreclosure procedures. In 2007, Ryan’s company Metro Development Group purchased parcels of land across Florida, with majority of them located in the area of Tampa Bay.
The acquisitions were done while Florida’s real estate market was starting to fall into pieces. In December 2007, Metro Development purchased about 8,300 land sites from financially-struggling homebuilding company, Lennar.
The following month, Metro Development purchased additional 1,000 parcels from M/I Homes. In the early months of 2008, Ryan’s company already controlled about 30,000 land sites in Florida.
Fast forward to 2009 and 9,000 of Ryan’s land sites are embroiled on foreclosure procedures and placed under court-appointed receivership. Metro Development was established by Ryan in 2003 during the start of the housing boom. Ryan is a son of a Canadian developer who got involved in litigations during the collapse of the housing market in the mid-1990s.
Ryan started with a $20 million-business and grew it to $200 million in just three years. His company was part of about 60 development projects across Central Florida.
By the time Ryan completed the M/I Homes acquisition, Florida’s real estate market was on its way to collapse, resulting to builders that ventured into the business land development, to need cash infusion.
Metro Development has a revolving credit line from five banks, totaling $175 million. The M/I and Lennar acquisition deals were backed by $250 million from Metro Development’s joint venture with hedge fund, D.E. Shaw Co.
Metro Development Vice President Rob Ahrens explained that the Lennar transaction was structured in such a way that the development company could hold on to the property for more than a year until the market showed some improvements.
According to Ryan, the Lennar deal was part of his company’s long-term strategy. He blamed the credit crisis for the failure of the market to recover. In October 2008, five lenders initiated foreclosure procedures against Metro Development and its subsidiaries. They said that The Ryan Group had defaulted on its credit agreement with them. Metro Development stopped paying its mortgages in June.
Metro Development owes $80 million to Wachovia, $40 million to Fifth-Third Bank, $20 million for both Raymond James Bank and Everbank and $15 million for Bank of America in connection with its purchase of LaSalle Bank.
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