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The lenders and the project’s developers, CityPlac South Tower, LLC, an affiliate of The Relatee Group, reached an agreement in whic the new partnership will acquire title to all unsold unitds inthe project. Scotia a subsidiary of , filed a foreclosure lawsuir against CityPlace South Tower Wednesday in Palm Beachn CountyCircuit Court. The complaint was basex on the $134.7 million mortgage the bank and its partnersd gave the developerin 2006. The projectt is 100 percent complete and all constructioh debts and obligations have been Jorge Perez, chairman and CEO of the Miami-basedf Related said in a presz release.
CityPlace South Tower contracted to sell 367 unitsa while the building wasunder construction. But when the buildinb opened in summerof 2008, many buyers walkex away from sales contracts. So far, 39 units have Due to these unit buyer Related said in a news release that it was necessarh for the developer to renegotiate the termw of its construction loan withthe lenders, whic h was scheduled to be repaid in July through proceedsw from unit closings.
Alici a Cervera, president of Related Cervera Realty Services the exclusive sales agent for CityPlaceSouth Tower, said in the news releasee that the successful transition between the developer and the new partnershi provides significant benefits to current and future buyers. “The lenders are not interestedx in generating sales in the buildinygthrough large-scale ‘bulk’ sales and are workinv with RCRS to ensure that CityPlace South Tower’xs integrity is fully protected and that it continuea to offer a first-class owner she said. Brad Scherer, president of Wellington-based real estate brokerage firmAtlantic Western, is working with the lenderss as a consultant.
He said CityPlace South Towere couldn’t repay the mortgage on time because mostbuyers didn’ close on the units. Scherer said the lender s will adjust the pricex downward in response to the markeft and leasesome units, but they won’tg do a massive discount or convert the building into rentals. They will financiallty support the condo association and maintai n CityPlaceSouth Tower’s amenities, he added. The Related Groulp will be compensated for continuing to manage the Scherer said. That’s a far cry from most foreclosures, wher e the developer and its principals are often held liable forthe losses.
“I don’t think the recognition of losshas occurred, or maybes it will never occur,” Scherert said. “If the property market comes back and the propertuy is managed ina first-class manner, therw may not be a According to court documents, the partnerz in the $134.7 million loan that will take controk of CityPlace South Tower are: Bank of Nova $23.7M Cherish Thompson, the Miami-based attorney who represents Bank of Nova Scotia in the complaint, didn’t immediately return a call seeking