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Condo Meltdown
City Square Developer Raises Cash in
Bulk sale
June 04, 2010
By: Eric Kalis - Daily Business
Review (Miami)
Maefield
Development, which has been busy
trying to save its massive City Square
project in Miami, sold 46 residential
condos and two commercial units in
Capri South Beach for nearly $31
million.
Operating as
MaeCapri, Indianapolis-based Maefield
sold the units for $30.79 million to
Capri Residential Properties,
according to Miami-Dade County
records.
Maefield chief
executive Mark Siffin declined to
discuss the bulk sale when reached for
comment on Friday.
Maefield
only sold 20 of 69 residential units
before the bulk sale, according to
Miami-Dade County records. With the
sale to Capri Residential, Maefield
has three unsold residential units
remaining.
Capri Residential
paid per-unit prices ranging from
$157,398 to $1.5 million, according to
Miami-Dade records. No financing was
recorded with the sale.
Maefield also sold a pair of condos at
The Strand on Ocean for $10 million to
Capri Residential affiliate Strand
Commercial Properties, according to
Miami-Dade records. The two condos
total 12,488 square feet.
Capri Residential obtained a $4.5
million loan from Sabadell United Bank
for the Strand condos.
Miami
attorney Diane Hernandez, who
represented Capri Residential in the
purchase, did not immediately return a
call for comment.
State
corporate records do not list a
principal for Capri Residential. Calls
to a phone number listed by state
records were not immediately returned.
Maefield was a �victim of the
times,� said Miami Beach broker Mark
Zilbert, who was not involved with the
Capri transaction.
�When Capri
came to the market, people were shying
away from new purchases,� Zilbert
said. �There was a lull for a couple
of years. Had the project premiered a
year or two earlier, all the units
would have sold and you would have
never seen a bulk sale.�
Bulk
condo sales have become the norm in
South Florida as developers of stalled
projects face continued pressure from
lenders. Many recent bulk deals have
occurred in downtown Miami and
Brickell Avenue areas, not Miami
Beach.
Maefield apparently did
not sell the units to satisfy an antsy
lender. Miami-Dade County did not
record any foreclosure actions against
Maefield. Fremont Investment & Loan of
Brea, California, gave Maefield a
$60.45 million loan in May 2005. The
loan was assigned to iStar Financial
in December 2008.
Maefield
�was probably sitting there with a
project that had not been selling
well,� Zilbert said. �There’s a
breaking point every developer has.
The buyers we spoke to about Capri
were kind of afraid about who will be
there� with so few prior closings.
Zilbert predicted the wave of bulk
condo deals in the region will soon
pass as buyers become more comfortable
with pricing.
�We won’t see
many more bulk deals,� Zilbert said.
�Individual buyers are regaining
confidence. They are not going to
overpay, but in some cases the fear of
paying a premium to get something
special is diminishing.�
Capri
Residential should be able to support
the purchase price by renting out some
of the condos immediately and then
selling them over a two- to five-year
period, he said.
�It should be
a damn good investment,� Zilbert said.
WELCOME CASH
For
Maefield, the Capri bulk sale
generates much-needed revenue as the
company attempts to close on the
purchase of 10 acres next to the Miami
Herald building in downtown Miami for
the long-discussed City Square
project.
Miami attorney and
developer Pedro Martin signed a
contract in March 2005 to buy the land
from then-Herald owner Knight Ridder
for $190 million and immediately flip
it to Maefield for $230 million. The
sale’s closing has been delayed
numerous times since then.
Current Herald owner McClatchy has
extended the purchase agreement
several times, including last January
when it moved the closing deadline to
January 2011 in exchange for an
additional $6 million deposit.
Maefield and Martin would lose $23
million in two deposits and a
termination fee if they fail to close
on the purchase.
The most
recent proposal for City Square is an
eight-story parking garage topped by a
pair of 200-foot video billboards. The
garage and billboards, which Siffin
said in May were �always part of the
project,� have been pushed to center
stage as a proposed retail center and
twin 70-story condo towers take a back
seat.
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