South Florida Developers Under Attack By Their Lenders?

The South Florida Business Journal reports on downstate Florida developments involving unsold new housing units, condo conversions, and unfinished projects that appear to have possibly run aground and now face foreclosure:

• Club Caribe faces foreclosure: Club Caribe in Coconut Creek has joined the widening club of South Florida developments facing a foreclosure lawsuit from Miami-based Ocean Bank. The notice of foreclosure filed in Broward County targeted the 150 units still held by the developer. It exempted the 227 units in Club Caribe the developer has sold. Club Caribe Associates bought the former apartment complex in 2005 for $63 million and obtained a $59 million mortgage from Ocean Bank. It started selling units the following year.

• Fort Lauderdale’s La Preserve faces foreclosure: La Preserve, an upscale, single-family home project in Fort Lauderdale, is facing a foreclosure lawsuit from Wachovia Bank. The 67-home project offered homes priced from $700,000 to more than $1 million. According to Broward County property records, La Preserve LLC still owns 33 single-family homes and home sites in the development.

• Holiday Inn Fort Lauderdale faces foreclosure: The Holiday Inn hotel near the beach in Fort Lauderdale faces a foreclosure lawsuit from Fifth Third Bank. It is the latest in a line of South Florida hotels slipping into foreclosure amid the recession. The Comfort Inn in Palm Beach Gardens has been scheduled for a foreclosure sale. The developer purchased the Holiday Inn Fort Lauderdale in July 2007 for $15 million. It developer took out a $12.6 million first mortgage and a $13.7 million second mortgage.

• Little Havana condos in foreclosure sale: A foreclosure sale has been scheduled for Feb. 13 to auction off 56 units in the Altos de Miami condominium in Miami's Little Havana neighborhood. The mixed-use project, has 134 units and 10,000 square feet of ground-floor commercial space. The developer started closings in spring 2007 and sold 78 units. The units that did not sell will be up for public sale.

• Banks foreclose on Havana Lofts: HSBC Bank and Great Florida Bank have filed a foreclosure lawsuit regarding the Havana Lofts project in Miami’s Little Havana neighborhood. The notice of foreclosure applied only to the 75 unsold units in the 90-unit high-rise.

• Miami’s Wind by Neo condo in foreclosure: The developer of Wind by Neo, a 42-story, 498 unit condo along the Miami River is facing a foreclosure lawsuit from Wachovia Bank. In February, the Business Journal reported that the project was one of 191 that BankUnited would not write mortgages for – a result of declining market value and high investor concentration. The lawsuit exempts the 214 residential units and four commercial units the developer has already sold from the foreclosure action.

• Ocean Bank seeks foreclosure on Hallandale Beach project: Miami-based Ocean Bank filed a $2.3 million foreclosure lawsuit against a developer who converted a 32-unit building in Hallandale Beach into condos. Only four of the units sold, and 15 could not be rented out, according to the complaint, filed in Broward County Circuit Court.

• Regions files against Miami Beach projects: Regions Bank has filed new foreclosures against two Miami Beach condominium projects, Terra Beachside Villas and Terra Beachside Villas II. The foreclosures complete a triple play of foreclosure actions against Miami-based BSG Development. (A previous foreclosure was filed in October on BSG’s Cabana on Collins project.) The developer had taken $98.2 million in mortgages from Regions. Terra Beachside Villas is a 117-unit project has been stalled in mid-construction for months. Terra Beachside Villas II is a vacant parcel that was scheduled to be the second phase of BSG’s condo project. Cabana on Collins was expected to be a 210 unit complex when completed.

• Foreclosures are seizing developments of all types: From the most prized properties to decades-old apartments that gambled on a condo conversion, all kinds of South Florida developments are falling victim to foreclosure.