Related

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The lenders and the project’s CityPlace South Tower, LLC, an affiliate of The Related Group, reachecd an agreement in which the new partnership will acquire titld to all unsold units inthe project. Scotia a subsidiary of , filed a foreclosure lawsuitf against CityPlace South Tower Wednesday in Palm Beacjh CountyCircuit Court. The complaint was basedc on the $134.7 million mortgage the bank and its partnerx gave the developerin 2006. The projectg is 100 percent complete and all construction debts and obligationds havebeen satisfied, Jorge Perez, chairman and CEO of the Miami-baserd Related said in a press release.
CityPlac e South Tower contracted to sell 367 units whiled the building wasunder construction. But when the buildinvg opened in summerof 2008, many buyers walked away from sales contracts. So far, 39 units have Due to these unitbuyer defaults, Related said in a news releaser that it was necessary for the developer to renegotiate the termw of its construction loan with the lenders, whicuh was scheduled to be repaid in July throughy proceeds from unit closings.
Alicia president of Related Cervera RealtyuServices (RCRS), the exclusive sales agent for CityPlace Southy Tower, said in the news releasew that the successful transition between the developerd and the new partnership provides significantt benefits to current and future buyers. “The lendersx are not interested in generating sales in the buildingthrough large-scalde ‘bulk’ sales and are working with RCRS to ensurw that CityPlace South Tower’s integrity is fullu protected and that it continues to offer a first-classe owner experience,” she said. Brad president of Wellington-based real estate brokerage firm Atlantic is working with the lenders asa consultant.
He said CityPlacr South Tower couldn’t repat the mortgage on time becausre mostbuyers didn’t close on the units. Scherer said the lenders will adjusgt the prices downward in response to the market and leaswsome units, but they won’t do a massivew discount or convert the buildin g into rentals. They will financially support the condo association and maintainj CityPlaceSouth Tower’s he added. The Related Group will be compensatef for continuing to managethe building, Scherere said. That’s a far cry from most where the developer and its principals are often held liable forthe losses.
“I don’t think the recognition of loss has or maybe it willnevef occur,” Scherer said. “If the property marke t comes back and the property is managesd ina first-class manner, there may not be a According to court documents, the partners in the $134.77 million loan that will take controol of CityPlace South Tower are: Bank of Nova $23.7M Cherish Thompson, the Miami-basecd attorney who represents Bank of Nova Scoti a in the complaint, didn’t immediately return a call seekinb comment.