Company behind Park West apartments set to default nearly $7 million in debt

Published: Jul. 1, 2022 at 8:59 PM CDT
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COLLEGE STATION, Texas (KBTX) - The company behind Park West - Texas A&M University is in financial trouble. NCCD- College Station Properties LLC is set to default on nearly $7 million dollars in debt Friday.

NCCD- College Station Properties LLC is a separate entity of the National Campus and Community Development Corporation (NCCD). According to the NCCD website, it manages its entities’ financing team through negotiations, closing and funding.

According to Moody’s Investor’s Service, the company was set to pay $15.265 million in principal and interest yet only paid $8.5 million. Moody’s reported that this is due to an oversaturated student housing market that has made it challenging to pay bond debt.

NCCD also maintains ownership responsibilities throughout the entity’s financing. Those responsibilities include supervising property managers and their budgets and operations. In addition, NCCD oversees communication with federal and state regulatory bond entities and bondholders along with tax filings, audits and insurance.

The Securities and Exchange Commission compares bond debts to an IOU. According to the SEC, “investors who buy corporate bonds are lending money to the company issuing the bond. In return, the company makes a legal commitment to pay interest on the principal and, in most cases, to return the principal when the bond comes due, or matures.”

When a company defaults on a bond, its creditworthiness becomes a concern to bondholders. Experts believe the process forward can be complicated for properties that default, including an increased risk they’re sold at a loss to appease creditors.

Park West is a public-private partnership, which means Texas A&M owns the land the complex sits on, but the university has no financial involvement with this matter. KBTX reached out to Texas A&M and the Texas A&M University System for comment, but no one was available due to the Independence Day weekend.

National Campus and Community Development is also behind the Texas A&M Hotel and its parking garage. These developments are separate projects and not expected to be affected by the default.

For more details on the default, click here.

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