SACRAMENTO, Kalifornia - June 26, 2009 - Gated and impeccably landscaped, the Magpie Creek condo development typifies developers’ faith during the housing boom that new homes were so hot they would sell anywhere.

The three-storey complex, built in 2006, sits next to Interstate 80 near Del Paso Heights in the Glenwood Meadows neighborhood, a mix of new homes and overgrown empty lots, self-storage facilities and ramshackle duplexes.

As the housing market turned, most of Magpie’s condos sat unsold and the bank foreclosed last year.

Last month, the 49 remaining units were sold to Bay Area investors for $3 million, well below the original construction loan of $7.4 million, according to county documents.

While still scarce, some say foreclosures of commercial and multifamily properties such as the Magpie development will be the new face of the real estate crash.

“I expect a wave of commercial foreclosures in the next 18 to 24 months,” said Tony Wood, senior vice president at TRI Commercial Real Estate in Roseville and one of the brokers who represented United Commercial Bank in selling the foreclosed portion of the Magpie development to investors. “Commercial real estate nationally, as well as in Sacramento, is facing a similar scenario that the residential market was facing just a few years ago. The decline in values has impacted even the best of borrowers.”