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A Wisconsin company that manufactures and distributes food-processing ingredients has been selected to purchase the opulent Chateaux on Central brownstone project. The winning bid: $7 million.

The unfinished residential development at the northwest corner of Central Avenue and Palm Lane has been financially troubled since construction started in 2005. All forward movement stopped when the lender, Mortgages Ltd., took it back in 2008 shortly before that company was forced into Chapter 11 bankruptcy protection.

Mark Winkleman, chief operating officer of ML Manager LLC, said MSI West Investments LLC submitted the winning bid for the Chateaux. Closing on the property is scheduled for March 12.

ML Manager is the court-approved entity administering the Mortgages Ltd. loan portfolio in the wake of the lender’s bankruptcy. The Chateaux is one of the first Mortgages Ltd. properties to be sold off.

Dave Clark, CEO of Mainstreet Ingredients of La Crosse, Wis., confirmed that his company is behind the winning bid. Mainstreet recently created MSI West, a limited-liability company registered with the Arizona Corporation Commission.

“We are looking to diversify,” Clark said. “We’re very excited about this.”

The company has purchased real estate in other states and started looking around the Phoenix area last year.

“We like what we see in downtown Phoenix,” Clark said. “We feel this will be a good investment, but we’re not here to turn a dollar.”

Clark said he didn’t want to talk about plans or other participants in the deal until the transaction closes, but said he expects the community and city officials to be pleased when that information is revealed.

He did not disclose whether the property would remain a luxury brownstone community of multimillion-dollar homes — the original vision of Phil and Mollie Anderson, owners of Pro Star Realty Inc. and founders of Central PHX Partners LLC, the Chateaux’s development entity.

The project was designed as 21 five-story residences with private elevators and rooftop terraces. The announced prices ranged from $2.8 million to $4.5 million per unit, but none were sold.

Desert Hills Bank provided the first construction loan, but the relationship soured when the bank filed a lien on the property. The late Scott Coles, then CEO of Mortgages Ltd., stepped in to salvage the project, saying he believed in what the Andersons were trying to accomplish.

According to Winkleman, Mortgages Ltd. loaned Central PHX Partners $37 million. When that was not enough to complete the development, Coles took back the property in spring 2008.

In an April 2008 story by the Phoenix Business Journal, Coles said the loan was in default. “I always try to work with these guys, but I have to protect my investors,” he said in that story.

Coles committed suicide on June 2, 2008, thrusting the entire Mortgages Ltd. loan and property portfolio into limbo.

Within a month of Coles’ death, several borrowers forced Mortgages Ltd. into Chapter 11 bankruptcy. After more than a year, a reorganization plan was put into place with Winkleman, former commissioner of the Arizona State Land Department, named to administer the loans.

Winkleman said his sole responsibility is collecting on those loans, either from the borrowers or through foreclosure actions, and paying investors whatever can be collected from the proceeds. Winkleman said several bids were submitted prior to the Chateaux on Central auction.

“We received several offers, but this buyer took the time to carefully inspect the project and proved to us that they had the funds to close the transaction,” Winkleman said.

According to Mainstreet Ingredients’ Web site, Clark founded the company in 1989 “with an in-depth understanding of the dairy and food markets and a commitment to the highest possible standards for the food industry.”

The company employs food scientists who have created trademarked food stabilizers, protein products, and dairy-based and bakery ingredients. The company shipped 125 million pounds of product last year, according to the site.

Wisconsin company to buy Chateaux for $7M – Phoenix Business Journal:.

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A global survey of more than 2,000 high-net-worth investors commissioned by Barclays Wealth reveals that approximately one in four respondents (26%) believe that residential and commercial real estate provide better long-term prospects than other asset classes.

Slightly more than half of respondents expect an increase in the value of their real estate investments over the next two years, and 35% plan to increase their real estate exposure in the near term. The survey findings were contained in a Nov. 30 report titled �Prospects for Property: On Solid Foundations?�

What�s the basis of such optimism in the face of global economic headwinds and a lingering credit crunch? One explanation is that 40% of respondents with at least $50 million in assets have more than half of their investment portfolio tied up in real estate.

�The survey has revealed that investors are holding a much higher proportion of their wealth in real estate than we would normally recommend,� says Michael Dicks, chief economist at Barclays Wealth in New York. �This suggests a real need for people to consider diversifying their portfolios into other asset classes in order to reduce risk.�

Barclays Wealth provides high-net-worth clients worldwide with banking and investment management services. The global wealth manager�s client assets total $221 billion.

The Economic Intelligence Unit, a division of London�s Economist Group, conducted the survey of high-net-worth individuals with investable assets ranging from $800,000 to more than $48 million. The survey was conducted in August and September.

U.S. gets thumbs up

Slightly more than 75% of respondents currently invest primarily in their domestic real estate markets. The United States ranks as the most attractive global market for commercial and residential real estate, with 16% of respondents selecting this market.

China and the United Kingdom are tied as second most appealing real estate markets, according to the survey results, while India is a tad behind in fourth place. France, Spain, Canada, Brazil, Germany and Australia round out the list of top 10 markets.

Among the 10 countries and regions most heavily represented in the survey, investors from Middle Eastern countries and Canada are most likely to increase their allocations, while Spain is the only country in which the average allocation to real estate is expected to fall.

“Within the context of their existing real estate portfolios, it is encouraging to see that some respondents are looking overseas,� says Dicks of Barclays Wealth. �However, there is evidence in the report of home bias, when investors prefer to focus on the market they know best. Diversification overseas is an important means of avoiding an excessively concentrated real estate portfolio, and investors also seem to underestimate how straightforward it can be to achieve this through vehicles like REITS (real estate investment trusts).�

What�s the advantage to investing in residential real estate? Nearly four out of 10 respondents (38.3%) say that the key advantage is the potential for rental income, followed by the capital gains potential (28.6%), and the long-term track record of the sector (27.1%).

�Investors find real estate to be an attractive investment for a variety of reasons, including the potential for both capital appreciation and rental income,� concludes Brian Nick, investment strategist at Barclays. �But we have to weigh those potential benefits against the fact that the real estate market is neither liquid nor transparent, which are also desirable characteristics for assets in a portfolio.�

High-Net-Worth Investors Turn Bullish on Real Estate, But Study Suggests They Are Too Exposed.