Underhill Associates in line to buy troubled Regency Tower condo - WDRB 41 Louisville News

Underhill Associates in line to buy troubled Regency Tower condo building

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Regency Tower at U.S. 42 and Seminary Drive (courtesy NTS Development Co.) Regency Tower at U.S. 42 and Seminary Drive (courtesy NTS Development Co.)

LOUISVILLE, Ky. (WDRB) --  Louisville development firm Underhill Associates is in line to purchase Regency Tower, the mostly vacant luxury high-rise building that went into foreclosure in 2013.

With a bid of just over $9 million, Regency Tower Acquisition Ltd. -- a group formed by Underhill Associates principals Jeff, Todd and Colin Underhill and Matt Willinger – has been recommended to a federal judge as the “top potential purchaser” of the property.

Proceeds from the court-ordered foreclosure auction will repay PNC Bank for a portion of the more than $20 million it's owed from the original development group led by Norm Risen.

With terraces in every unit, underground parking and a climate-controlled wine cellar, the building once known as Seminary Woods hit the market just before the real estate crash in 2008 and was never able to command the premium prices its original investors sought.

Only 13 of the 55 units have been sold – and three of the sales were to investors in the project or their family.

The slow sales pace and evident “lack of demand” for the units has “stigmatized” the property, according to a court-ordered appraisal by Valbridge Property Advisors.

As recently as 2014, the mostly 2- and 3-bedroom units were marketed around $325 per square foot, or $865,800 for the average-sized condo. But the real retail value is $713,150 on average, or $267 per square foot, according to another court-ordered appraisal by Cushman Wakefield.

The Underhill group is in line to purchase the building’s 42 unsold units, most of which are just “shells” without interior walls or finishes.

Their bid of $9,025,000 exceeded the only other named bidder, Arsenault Holdings of Louisville, Colorado, by $25,000.

NTS Development Co., the court-appointed receiver managing Regency Tower, reviewed the bids and made the recommendation.

In court documents, NTS disclosed four potential conflicts of interest with the Underhill group, including that NTS President and CEO Brian Lavin is Colin Underhill’s father-in-law. Neither Lavin nor Colin Underhill returned calls for comment Thursday.

The Underhills have a long track record of success in Louisville with projects like the Westport Village shopping center. Their current projects include the Germantown Mill Lofts and Heritage Green, the former Americana apartments in south Louisville.

“Underhill Associates stands out from our competition because we take on challenging projects, often in difficult surroundings,” Colin Underhill wrote last year for Louisville Business First, which named Underhill its small company Business of the Year.

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