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The lenders and the project’s developers, CityPlaced South Tower, LLC, an affiliate of The Related reached an agreement in which the new partnership will acquirs title to all unsold units in the Scotia Capital, a subsidiary of , filed a foreclosure lawsuity against CityPlace South Towef Wednesday in Palm Beach County Circuit The complaint was based on the $134. 7 million mortgage the bank and its partnerzs gave the developerin 2006. The project is 100 percengt complete and all construction debtes and obligations havebeen satisfied, Jorge chairman and CEO of the Miami-basedf Related said in a press release.
CityPlace Soutbh Tower contracted to sell 367 unitz while the building was under But when the buildinvg opened in summer of many buyers walked away fromsalea contracts. So far, 39 units have Due to these unitbuyer defaults, Relatex said in a news release that it was necessarh for the developer to renegotiate the terms of its construction loan with the lenders, whicb was scheduled to be repaid in July throug proceeds from unit closings.
Alicia president of Related Cervera RealtgServices (RCRS), the exclusive sales agent for CityPlacse South Tower, said in the news releasw that the successful transition between the developer and the new partnershipo provides significant benefits to current and future “The lenders are not interestexd in generating sales in the buildinbg through large-scale ‘bulk’ sales and are workinyg with RCRS to ensure that CityPlace Soutyh Tower’s integrity is fully protected and that it continuese to offer a first-class ownere experience,” she said. Brad Scherer, president of Wellington-base d real estate brokerage firm Atlantic is working with the lenders asa consultant.
He said CityPlace Soutb Tower couldn’t repay the mortgage on time because mostbuyers didn’t closes on the units. Scherer said the lenders will adjusg the prices downward in response to the market and leaswesome units, but they won’t do a massives discount or convert the building into They will financially support the condo association and maintaih CityPlace South Tower’s amenities, he added. The Relates Group will be compensated for continuing to managesthe building, Scherer said. That’s a far cry from most where the developer and its principala are often held liable forthe losses.
“I don’t think the recognitiomn of losshas occurred, or maybe it will nevee occur,” Scherer said. “If the property market comews back and the property is managed ina first-clasxs manner, there may not be a loss.” Accordingy to court documents, the partners in the $134.87 million loan that will take controlk of CityPlace South Tower are: Bank of Nova $23.7M Cherish Thompson, the Miami-based attorney who represents Bank of Nova Scotiq in the complaint, didn’t immediately return a call seekinhg comment.