The North Pier Ocean Villas timeshare condominium in Carolina Beach is under a nearly ironclad deal to be sold for $8.3 million in bankruptcy proceedings, pending final approval from the court.
Eight shortlisted bidders arrived at United States Bankruptcy Court in Raleigh on Thursday morning and engaged in a heated contest.
“We had a lively auction, to put it mildly,” David Haidt, the attorney for the North Pier Ocean Villas owners association, told U.S. Judge David Warren.
Cekra Inc., a Wilmington-based industrial contractor, was the highest bidder, offering to buy the troubled property for $8.3 million, according to Haidt. A backup bidder, Robert Buchanan, is next with an offer of $8.25 million. Cekra representatives did not immediately respond to a request for comment.
“It’s crazy how I put you weeks and weeks into this…then it all ends in an auction that takes 15 minutes,” said Rob Tramantano of Chapel Hill-based Great Neck Realty Co., specializing in bankruptcy sales. In total, Tramantano courted 100 potential buyers by Thursday.
The 42-unit North Pier Ocean Villas property wound up on the auction floor after his HOA filed for Chapter 11 bankruptcy in August 2021. Representing owners who shared the units among 2,184 weekly timeshares, the HOA lacked the money to bring one of the property’s two buildings up to code. The Canal Drive frontage building is occupied and in much better condition than the Salt Marsh Lane frontage building, which may be considered decommissioning based on rehabilitation costs, considering local code requirements.
This structurally damaged and unoccupied building would otherwise be subject to condemnation, but the city’s building inspector has put the proceedings on hold so that the HOA settles its financial affairs through bankruptcy. With the damage accelerated by Hurricane Dorian in 2019, the HOA was already in a financially troubled position, after decades of timeshare owners turning in their deeds to the HOA to stop paying annual dues, officials previously said. co-ownership in court.
Developed in the ’80s, the property has beachfront royalty on the northernmost point of Carolina Beach, just before the entrance to Freeman Park.
Representing the HOA, Tramantano said the auction price exceeded everyone’s expectations. In February, he guessed the property could sell for up to $7 million.
“I think it’s a function of the market,” Tramantano said. “Opportunities are limited and obviously these bidders saw great opportunities in this property, so it couldn’t work better from our perspective.
At the minimum bid price of $3.95 million, each of the condominium’s 2,184 timeshares could fetch about $1,800. If the highest bid held, they could each receive checks for around $3,800. The HOA owns approximately half of all the shares, owing to the deeds of return, and will repay its debts using this proceeds, in accordance with court-approved sale procedures.
“We have a very firm contract with absolutely no way out, or any condition by which the buyer can terminate the contract,” Tramantano said.
The closing will take place within 10 days of the court’s approval of the final sale order, which has not yet been delivered to the judge. Tramantano plans to close during the first week of May.