UPDATE: Got $40 Million? A Florida Development Needs You
The Forkosh Development Group wants millions of dollars worth of help in suburban Miami.
The developer seeks an equity partner – with $30 million to $40 million – to help jumpstart the stalled 52-story Solis Resort Spa & Residences project in Sunny Isles Beach, reports trade pub Commercial Mortgage Alert.
Forkosh has already poured some $53 million into the project that includes 135 condos, a 140-room luxury hotel and an 11-story garage. When it broke ground in February 2007, prices started at $1.2 million. (These days, projects are commanding steep discounts.)
According to the Alert, the Solis was to be finished last summer. Lehman Brothers was set to fund the bulk of the work, but that fizzled with the firm’s bankruptcy.
Finding a partner won’t be easy: The Miami condo market’s overbuilding and subsequent implosion is legendary. Between 2003 and 2010 In Sunny Isles alone, developers built nearly 30 condo projects with more than 6,300 units boosting inventory by 53% according to real estate consultancy Condo Vultures. Too much inventory fueled a housing crash that continues plaguing lenders: They repossessed an average 83 properties per day in South Florida last year.
“In order to secure an equity investor, the developer will have to give away the store,” said Peter Zalewski’s Condo Vultures’ founder. “I can’t imagine a scenario where an investor will come in and support a project that’s under construction, given the fact that there are three towers with 1,000 units next door.”
Just 40% of those units are sold, he adds. Any future deal will probably be made “on the courthouse steps.”
Developments tried contacting Forkosh’s New York and South Florida offices, but was told “no one is here today.” Good thing we weren’t ready to write a check.
via UPDATE: Got $40 Million? A Florida Development Needs You – Developments – WSJ.