Gadsden Properties Inc.'s operating subsidiary, Fremont Hills Development Corp., filed for voluntary Chapter 11 bankruptcy relief to stay any risk of a foreclosure action on the Mission Hills Square mixed-use development site in Fremont, Calif., by the first-lien mortgage lender.

The bankruptcy petition, filed in the U.S. Bankruptcy Court for the Northern District of California, would give the diversified real estate company and its unit some time to explore options for the property, including refinancing of the secured loan, a new money loan to finalize project construction, or a sale of the asset.

Gadsden and its unit are aiming to obtain a senior secured super-priority debtor-in-possession loan that would fund the bankruptcy process, and they intend to seek sale or development options for the project.

Mission Hills is the company's principal asset and is expected to feature 158 apartment units and more than 53,900 square feet of commercial retail space.