Behringer Harvard Holdings LLC, a major sponsor of non-traded real estate investment trusts (REITs), is apparently having a hard time coming up with the cash to make payments on loans for two of its offerings. As a result, it’s quickly losing real estate assets.
As reported June 27 by Investment News, the non-traded REIT known as Behringer Harvard Opportunity REIT saw several properties enter into bankruptcy protection earlier this month. Another Behringer fund, Behringer Harvard Short-Term Opportunity Fund I, entered into a “deed in lieu of foreclosure agreement” that essentially transferred properties back to the lender.
Both the Behringer Harvard Opportunity REIT and the Behringer Harvard Short-Term Opportunity Fund I have been on the decline for many months, with their estimated valuations falling dramatically over the last year.
Behringer Harvard Opportunity REIT I saw its estimated value decline 46% at the end of 2011 to $4.12 a share, from $7.66 a year earlier. As of Dec. 31, investors in the Behringer Harvard Short-Term Opportunity Fund I LP saw its valuation drop to an astonishing 40 cents a share, down from $6.48 a share as of Dec. 31, 2010.
Meanwhile, more trouble could be ahead for both Behringer funds. The Opportunity REIT I is sitting on an additional $68.4 million in debt that matures later this year. As for the Short-Term Opportunity Fund I, it now has about $64 million in total assets after the recent shedding of some of its real estate assets. That compares to $112.5 million it reported in March in a filing with the Securities and Exchange Commission (SEC).