As I’ve mentioned before, for the first 14 years of my life – I lived in Asbury Park, NJ; since I’ve never lived more than 10 minutes away from Asbury Park, and I’ve seen it go from a pretty decent tourist attraction to the dumps. Now I’m watching it slowly pick itself back up again after some unrelated event sends it back 3 years.

In 2001 a company called Asbury Partners purchased most of the waterfront land in Asbury with the goal of tearing down eyesores, rebuilding the infrastructure and building retail and housing components. 8 years later – there has been significant progress, but not at all the amount of progress Asbury Partners and the general public was hoping for.

Locally, the skeptics all claim that Asbury Partners was another sham developer who never went through with their promises, etc etc – but I’m a firm believer that Asbury Partners did A LOT, and their main downfall was due to the economic fallout that has been experienced throughout all development in the world.

I think it deserves to be mentioned how Asbury Partners brought in Madison Marquette to spearhead the boardwalk re-development. That is – development on the boardwalk. Madison Marquette has done an amazing job reinvigorating the boardwalk and the retail components on the boardwalk. They’ve even gone above and beyond what they initially “signed up for” by purchasing a condo development (Wesley Grove) that would have gone into receivership and provided another black eye to Asbury.

Today I found out that Asbury Partners has essentially defaulted on the loans they took out to purchase the waterfront property and it will be taken by iStar Financial, who will then become the Master Developer of Asbury.

(Bit of a side note: iStar Financial was started by Barry Sternlicht and Starwood Capital in 1993, in 1999 it was spun off into its own independent company. I just love learning about the influence that Starwood Capital has had.)

In the article from the local newspaper (Asbury Park Press) it states that iStar will essentially become the Master Developer – and will look to get its money back from the defaulted loan by selling the individual properties that Asbury Partners currently owns.

Whats odd about this arrangement is that iStar doesn’t seem to have any experience in real estate development.. iStar is a financial company which deals in real estate transactions.. From their website:

Today, iStar is a true “one-stop” private banker to high-end commercial real estate owners in the U.S. and internationally. We are primarily an on-balance-sheet lender with a full product range of capital solutions, from senior and mezzanine real estate debt to senior and mezzanine corporate capital, to corporate net lease financing and equity.

I have to say – iStar is a good company but I really have my doubts about them becoming the Master Developer of Asbury. It almost sounds as though this is a project that fell into their lap due to the economy, and instead of calling it a loss and writing it off – they are trying to make it work – by getting involved in something that is not entirely their forte.

My only hope is that iStar knows what its doing and really does have Asbury’s best interests at heart. I understand they have to make a profit – but at the same time, Asbury has been through so much troubled times..

Please don’t add to it.

andrew@alconic-inc.com

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