Koll Stock Drops Despite Bolsa Chica Win

Despite long-awaited approval of its Bolsa Chica housing project, Koll Real Estate Group stock closed down three cents a share Friday in very heavy trading.

Although a whopping 1.1 million shares changed hands--typically only 100,000 shares trade daily--the hike in volume didn’t move prices much, a signal that some shareholders are still uncertain about the company’s future.

“I don’t know why our stock didn’t increase. I would have thought it would move up significantly,” said Raymond J. Pacini, chief financial officer with Koll Real Estate Group.

Koll’s stock had increased in price in recent weeks from a 52-week low of 25 cents in early December as buyers speculated Koll would get approval from the coastal commission. But the company’s stock closed Friday at 43.7 cents a share on Nasdaq, down from 46.9 cents Thursday.

“For every eager buyer of Koll stock today, there is an eager seller,” said Steve Washburn, senior trader at Brookstreet Securities Corp. in Irvine.

On Thursday, Koll Real Estate Group received approval from the California Coastal Commission for a plan to build 3,300 homes in Bolsa Chica, one of California’s largest and most ecologically sensitive wetlands areas.

Under the plan, Koll must pay $48 million for wetlands restoration if it builds 900 homes on the lowlands. If it doesn’t build those homes, it will still pay $7 million in restoration, and some real estate specialists have questioned Koll’s ability to pay.

Koll Real Estate Group, which has about 75% of its assets tied up in Bolsa Chica, has reported losses of $16.9 million during the nine months that ended in September. That’s on the heels of a $12.9-million loss during the same period the previous year.

Pacini said Koll is considering a bank line of credit, a public offering or a private placement to help pay for the wetlands restoration, along with future home sales.

In a statement Friday, company Chairman Donald M. Koll called the Bolsa Chica approval a “significant milestone” in company efforts to “create value for our shareholders.”