With the economic turmoil that is sweeping the nation, from bankruptcies to foreclosures, it's only a matter of time before the effects hit home, leaving local development projects like Alameda Point in jeopardy.

Say "Lehman Brothers" to some investors and they'll likely reply with "stockbroker." Say the same to more savvy market-watchers and they'll quickly remind you about the now-defunct company's activity in the commercial mortgage business.

On Wednesday, Sept. 10, the company announced third quarter losses at a staggering $3.9 billion, which translated to $5.92 a share — far above the $3.92 a share loss the market had anticipated. Shares of Lehman Brothers stock plunged 45 percent on the news to trade at a meager $7.79 a share.

As the company scrambled to prevent its bankruptcy, it created a real estate portfolio, which it plans to spin off as REI Global.

"Analysts speculate the $32.6 billion commercial property fund is unlikely to be off-loaded in a fire sale," Dow Jones Wire's Dawn Wotapka writes. This "fire sale" might adversely affect properties in the portfolio, which include some belonging to Alameda Point developer SunCal.

According to Wotapka, Lehman said it conducted extensive "stress tests" on the portfolio, and is confident that REI Global has sufficient equity even in some of the worst possible scenarios

"It is not known if that stress test included a bankruptcy filing," Wotapka wrote.

The writer makes a timely and important point: On Monday, Sept. 15, five days after announcing its third quarter losses, Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy. When the markets closed on Friday, Sept. 19, Lehman's stock closed at 22 cents a share.

Just how heavily do SunCal properties weigh in this new REI Global spinoff? Wall Street Journal writers Michael Corkery and Susanne Craig filed a story exactly one week before Lehman filed for bankruptcy, informing the Wall Street Journal's readers that Lehman held $2.2 billion worth of SunCal properties on its books. "The firm already has written down the value to $1.6 billion — and could face further write-downs if home prices and land values keep sinking," the pair wrote.

According to the article, Lehman has invested some 70 percent of its SunCal dollars in seven projects, "located mostly along the coast, where values haven't fallen nearly as dramatically as in the inland areas."

Corkery and Craig wrote that the rest of the "nearly two dozen SunCal projects are in far-flung exurbs, including $250 million in the Inland Empire, one of the nation's hardest-hit housing markets."

They also reported that $50 million in liens burden SunCal projects in the Lehman portfolio and the Lehman is "working to pay these off."

Lehman is not the only Wall Street firm with its dollars invested in SunCal. International hedge fund "D.E. Shaw & Co. has invested around $200 million that involves 19 SunCal projects," one of which is Alameda Point, Corkery and Craig reported.

SunCal said it was bringing the hedge fund aboard to help pay expenses during the 24-month exclusive negotiation agreement (ENA) period, according to an Aug. 19 memorandum from City Manager Debra Kurita to Mayor Beverly Johnson. "(SunCal) initially represented that it would self-fund the exclusive negotiation agreement (ENA)-period expenditures," Kurita informed the mayor.

According to the memorandum, the hedge fund would invest $10 million to help SunCal pay for ENA-period expenses.

The memo indicated that SunCal has come to the city with hat in hand before. The same memorandum states that in March 2008, the developer asked for — and received — an extension on the original 24-month agreement.

"The bankruptcy filing by Lehman Brothers Holdings Inc. does not affect SunCal Companies' development in Alameda," SunCal spokesman Joe Aguirre said in a press release issued Monday, Sept. 15. "SunCal partners with various lenders and investors throughout the more than 50 developments in its extensive portfolio, and Lehman is not involved in Alameda Point in any way."

With the real-estate market in crisis mode and the bankruptcy of a Wall Street firm heavily invested in SunCal, the question remains whether Alameda Point will ever get off the ground or — like the jets that once used the Point's runways — stay grounded forever.