According to an article in the Star-Telegram, Margaux Development has filed for Chapter 11 bankruptcy in an attempt to reorganize its real estate partnerships, including Margaux Westover Partners which owns the 35-acre Margaux Westover Village at the southeast corner of Green Oaks Road and Texas 183. In its bankruptcy filing, Margaux Westover Partners lists its assets and liability between $10 million and $50 million.
The article said:
"Westover Village is planned to have 250,000 square feet for shops and restaurants in 11 buildings, but Silverman said they have completed only five buildings totaling about 125,000 square feet. The space is about 65 percent leased, he said. Silverman said they have seen little tenant activity for the shopping center this year, but that started picking up in September. He said leases are being negotiated for 2010."
The Margaux bankruptcy is just another symptom of the foreclosure crisis and the economic crisis in general. Creditors are pulling back on financing as the foreclosure crisis infects commercial real estate developments and they are pulling back on consumers as more people face job losses and long-term unemployment. Before the crisis, the economy was fueled by consumer spending which was in turn fueled by easy credit.
Easy credit no longer exists for consumers or for businesses and because of this, both are pulling back. Consumers pull back on spending and businesses pull back on expansion and even close their stores and/or file bankruptcy. This leaves commercial real estate developers such as Margaux financially vulnerable and often bankrupt. They are unable to find the tenants necessary to fill their sprawling complexes and sometimes they are even unable to find the funding to finish projects that were begun during the boom years.