Promontory: A living dinosaur?

Yesterday, we dodged the rain showers and went to visit Promontory, a bankrupt real estate project financed by Credit Suisse, the Swiss financial services outfit run by investment banker Brady Dougan. Between 2004 and 2006, that bank made more than $3 billion of senior secured "predatory" loans to high-end real estate developers operating mostly in the western United States. When Credit Suisse made the loans, it got paid millions in fees and then syndicated them all off to investors, who in the end might just get pennies on the dollar; Credit Suisse had minimal exposure to the original loans.

Promontory, is a gated 7,200 acre, second-home resort with 3 golf courses (2 of them already built) just outside of Park City, where the “top-of-bubble” average price of home stood in the $4 million range, and where out of over a hundred home built, 77 are currently back on the market. Common area charges and club membership dues are staggering and downright unsustainable. Some homes look as if they had been abandoned and unfinished for quite sometime and give the place a eerie appearance. We have a neighbor who built a “spec” home in the hope of making a “quick couple million dollars” that he had put on the market for more than $4 million, is now “reduced” to $2.5 million and isn't likely to find a taker anytime soon.

Today, the question remain as to who would buy these monsters, if so, at which prices and how will that project evolve. It looks like a dinosaur to me and with these animals, evolution has unfortunately run its course...