Speculation about the cause for the foreclosure of various high-profile properties owned by Marc Moen in downtown Iowa City is rampant following the excellent investigative reporting which was first scooped by Annie Smith Barkalow in the CBJ.
Did Mr. Moen and his group of partners get caught with the significant increases in interest rates? Refinancing a commercial loan with low rates over the past dozen years to something in the current range of 7% will undoubtedly cause financial challenges.
Mr. Moen was seen as a brilliant property developer who was able to deftly operate within Iowa City’s sometimes sensitive business climate, even receiving tax increment financing from the city to help finance some of his developments. He built Iowa City’s tallest structures, the 14-story Plaza Towers in 2005, the 14-story Park@201 in 2014, and the 15-story Chauncey in 2019.
Mr. Moen even won an Iowa Architectural Foundation’s Community Enhancement Through Architecture & Design award in 2021. The press release stated, “Over the course of 35 years, developer Marc Moen has worked tirelessly to help transform Iowa City from a college town, known in part, for its bar culture, into a sophisticated urban center. He has done this with architecture: rehabilitating historic buildings, creating new mixed-use developments, and supporting arts and culture initiatives.”
Now these high-profile downtown Iowa City developments and others are slated for a sheriff’s sale following a court ruling in favor of GreenState Credit Union, which filed a foreclosure suit against Mr. Moen and his associates for allegedly defaulting on about $28 million in loans.
We appreciated Iowa City Downtown District Executive Director Betsy Potter’s spin on the situation in a recent Gazette article. “The recent foreclosure filings involving properties downtown, while understandably notable, mark a natural point of market correction — a signal of a resilient and maturing real estate ecosystem,” she said. “These changes can open the door for a new generation of local ownership, community investment and renewed energy in some of our most iconic spaces.”
Regardless of the cause of these foreclosures, these high-profile downtown developments have helped Iowa City grow into something more than a college town.
And unless there are significant reductions in interest rates soon, there will undoubtedly be more foreclosures in the coming months and years, regardless of how brilliant a developer may have been.
A January 2025 online article by Benzinga and Yahoo Finance said that going into 2024, many economists and real estate observers were worrying about how much commercial real estate debt was on the books as unrealized losses for America’s financial institutions. “The Bear Traps Report” founder Larry McDonald told Fox’s Maria Bartiromo that $700 billion in commercial loans were set to mature in 2024.
Mr. McDonald described it as “a slow-moving train wreck,” and predicted darker days may be on the horizon.
According to the same article, many commercial developers and borrowers spent most of 2024 living by an unspoken policy that some referred to as “extend and pretend.” Under this policy, commercial lenders extended terms for borrowers in the hopes that people would return to work in large enough numbers to cause commercial property values to rebound. By and large, that hasn’t happened, and there is even more debt on the horizon.
$28M foreclosure ruling sends The Chauncey, other properties to auction
