Lyon Co., Partners Defaulting on 3 Properties : Real estate: Lender is foreclosing because investor group is more than $24 million behind on payments.

Illustrating the problems besetting Orange County’s home builders, William Lyon Co. confirmed Monday that foreclosure is imminent on three Northern California commercial properties in which it is an investor.

Richard M. Sherman, an executive vice president and general counsel for Lyon Co., said the properties are owned by partnerships that include executives with Lyon Co. and commercial developer Koll Co., both based in Newport Beach. The three partnerships are in default on a loan from Allstate Life Insurance Co. on office and industrial buildings in San Jose, Hayward and San Leandro. Composed of the same people, the partnerships owe a total of $24 million in principal plus interest and penalties.

The San Jose property, a six-building industrial complex, is slated for foreclosure Wednesday. Allstate is scheduled to take back the other two developments on July 28 unless the partnerships come up with the overdue payments.

William Lyon, the company’s founder and chairman, is not a partner or investor in the properties, Sherman said. Lyon Co. as a corporate entity owns 2.5% of the San Leandro development, 4% of the building in Hayward and 11% of the San Jose complex.

Given Lyon Co.’s minor involvement in the properties and the fact that Lyon concentrates on home building rather than commercial development, the defaults are “a tiny speck in the big picture,” said Kenneth Agid, a real estate consultant in Irvine.

“The only relationship the defaults have to the Lyon Co. is that some Lyon Co. people happen to be investors,” said Agid, principal in the Marketing Department.

Sherman said Monday that the properties are the only buildings connected with either Lyon Co. or Lyon Co. executives involved in any foreclosure procedure. “There are no foreclosures on land or residential developments owned by the William Lyon Co.”

Lynda Lane, a spokeswoman for Koll Co., referred questions about the properties to Lyon Co. officials.

Lyon Co. has not been alone in seeing its properties decrease in value over the past two years as the recession has continued to take a toll on California real estate. But because the company--ranked last year by Professional Builder magazine as the nation’s No. 2 home builder, second only to Dallas-based Centex Corp.--is considered one of the best managed and most reliably profitable developers in the industry, its financial woes have been watched with particular concern.

Among other bad omens, a consortium of Lyon Co. lenders has taken as collateral William Lyon’s beloved collection of 52 antique automobiles valued at more than $25 million.

“Most likely, the lenders re-evaluated assets on which the Lyon Co. had a loan, and found that the properties had fallen in value,” Agid said. “So they requested additional collateral to keep the loan. The collection is one of the finest in the world and may be more liquid than some of Lyon’s real estate holdings, so the lenders went after the easiest assets to liquidate.”

Lyon’s prized collection includes 10 Duesenbergs, a limited edition of cars manufactured in Indiana from 1929 to 1939. The vehicles sold new for between $13,000 and $25,000 during the depths of the Great Depression.

In a 1986 interview with the Times, Lyon said: “I just like being around classic cars, working on them and going to car shows. I really like car people. I feel I’m in my element.”

Members of the lending group holding the collection as collateral are Wells Fargo Bank, Continental Bank, Security Pacific National Bank/Bank of America, Chase Manhattan Bank and Union Bank.

Other than to confirm that it is being held as collateral, Lyon Co. spokesman Sherman would not comment Monday on the automobile collection, saying that it is the personal property of William Lyon and is unrelated to Lyon Co.

Last month the company laid off 73 employees, trimming its work force to 315.

Founded in 1954, Lyon Co. reported a profit of $772 million in 1991 and $1.2 billion in 1990.