Mixed-Use Miami Condo Property Under New Ownership
- Nov 30, 2010
November 29, 2010
By Barbra Murray, Contributing Editor
Everglades on the Bay, a dual high-rise condominium complex in downtown Miami, has just come under new ownership, courtesy of a $141 million all-cash deal. Rockwood Capital L.L.C. joined forces with Duncan Hillsley Capital and Fortune Capital Management Services to take the 849-unit residential mixed-use asset off the hands of lenders associated with the developer, Cabi Downtown L.L.C., which relinquished the reigns of the $300 million luxury property via a deed in lieu of foreclosure as part of its Chapter 11 reorganization plan.
It is an oft-told story. Anticipating continued demand, a developer plans a premier project at the height of the condominium market, totally unaware of the impending housing market collapse, and then falls victim to the credit crunch and topples under the weight of financial challenges. Such was the case for Cabi.
Back In 2003, Cabi had turned to Bank of America for a loan, and by the close of 2005, the developer had made advances under the loan for the construction of Everglades, resulting in a principal balance of $256 million, according to bankruptcy documents. Cabi opened the Fullerton Diaz Architects-designed Everglades at 244 Biscayne Boulevard in 2008, bringing two 49-story towers containing top-of-the-line condos, 100,000 square feet of amenities for residential use and 58,000 square feet of retail to the former site of the historic Everglades Hotel in downtown Miami’s arts and entertainment district. But hard times were ahead and the company defaulted on the $209 million balance on the construction loan in 2009. Facing debilitating financial issues, Cabi filed for Chapter 11 bankruptcy protection in August 2009, just as Bank of America initiated foreclosure proceedings.
The situation at Everglades was bad. But how bad was bad? Before construction of the condominium towers kicked off, Cabi had secured contracts on approximately 787 residences, but come August 2009, 669 of the buyers had withdrawn from their contracts. However, that was then and this is now. Cabi stayed on as the property’s onsite manager after transferring the title to lenders, and as of now, approximately 184 units have closed. The new owners are in the process of taking over management and plan to invest in capital improvements, and focus their attention on sales and marketing activities for a scheduled January re-launch.
Downtown condominium sales skyrocketed 110 percent during the first six months of 2010, according to a study released by the Miami Downtown Development Authority.