Oakland's Holy Names University, has been put up for after defaulting on a $49 million loan.

Oakland's Holy Names University, a private educational institution, has been put up for sale by commercial real estate firm CBRE after it defaulted on a $49 million mortgage loan.Oakland's Holy Names University, a private educational institution, has been put up for sale by commercial real estate firm CBRE after it defaulted on a $49 million mortgage loan. The university, including the buildings and land that make up the campus, has been put up for sale as the college is scheduled to shut down after the school year is complete this spring. The current zoning could allow the site to be redeveloped for housing, and CBRE stated that the future use of the school might not be as a university, once a sale goes through.

Located in the Oakland Hills, Holy Names University faces the cost of considerable deferred maintenance and regulatory compliance issues. The necessary upgrades could cost $200 million, which means that if the delinquent loan is paid off by a new owner, a buyer might have to come up with $250 million to keep the property operating as an accredited university.

The university's financial woes have been mounting for some time, with the most recent issue being a filing in February that stated the college had defaulted on the mortgage whose collateral is the school’s property, including the land and the buildings on the site.

In recent months, Holy Names University reached out to about 70 educational institutions to determine whether they were interested in taking over the university’s operations - and financial and debt obligations. Ultimately, the school narrowed down the field of prospects to four likely candidates, according to Sam Singer, a spokesperson for Holy Names University. None of them were able to find a viable financial solution for the school.

The university has decided to hire CBRE to handle the sale of the 58.6-acre campus at 3500 Mountain Boulevard in Oakland, but the lender, Preston Hollow Community Capital, has stated that its primary goal isn’t to gain ownership of the university property. Lenders often seek to avoid foreclosures because they would prefer not to be the owners of real estate.

"We are currently exploring next steps for the campus, and still believe the highest and best use for the space is to operate as a world-class university," said John Dinan, general counsel for Preston Hollow Community Capital. "We look forward to collaborating with the city of Oakland and community stakeholders to make this a reality."

Holy Names University officials disagree, however, saying that the lender has become an impediment to the university’s attempts to keep the school open through the end of the current term and to find a successor that can operate a university.

Despite the financial issues, the Holy Names University property has 15 buildings including a performing arts center, gymnasium, chapel, library, 30 classrooms, and housing for 450 students. The property is situated in the Oakland Hills, known for its single-family homes and proximity to downtown Oakland, downtown San Francisco, and UC Berkeley.

Any individual or organization that seeks to buy the site and operate the property as a university might face a daunting financial task. The necessary upgrades could cost $200 million, which means that if the delinquent loan is paid off by a new owner, a buyer might have to come up with $250 million to keep the property operating as an accredited university.

In conclusion, the sale of Holy Names University highlights the current challenges facing the education sector, especially the private educational institutions, in the United States. As schools face financial pressures, many are seeking to sell their assets, leaving students and staff uncertain about the future of their institutions.