Oct 15, 2019
I understand risk of development deal. However, Sponsor is expected to provide accurate and timely information and have mitigation plan identifyed and ready for execution. Northstar has demostrated complete failure in above aspects through Citadel at Colfax project.
1. Peforma model 6% construction cost loan whereas Sponsor obtained 12% which was not informed to the investors, along with its negative impact to performa or cash position or increase risk of capital call.
2. Given that project was already underway, I am not sure if Sponsor did sloppy work in modeling the performa or worst , all ready knew about on-going rate and didn't take corrective action.
3. Only when one look through successive quarter report, one can see that project was going south. Individual report are sugar-coated to down play impact of negative delopment..