Lender Dumps Loan On Oceanfront Development Site In South Florida

purchased the existing land loan on the proposed but never started 47-story Paramount Beach luxury oceanfront condominium in Sunny Isles Beach.

Sunny Isles Property Holdings LLC, with managing member Carlos J. Mattos, acquired the loan on Feb. 17 from iStar FM Loans for an undisclosed price. The original loan was made in November 2006 for $32.2 million and scheduled to come due in February 2009, according to the Miami-Dade Clerk of the Court.

Foreclosure proceedings were initiated against the owner of the Paramount Beach land in December 2008, according to the Miami-Dade Circuit Court.

It is unclear what the new owner of the loan has in mind going forward given the dramatic downturn in the South Florida real estate market and the unlikelihood that any new development, especially residential, will occur in the foreseeable future.

"Given the thousands of units that have been constructed in the Sunny Isles Beach area since 2003, we have serious doubts about whether anyone will be able to develop any additional residential product, especially high-end condo units, in the area for at least the next five years," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "With market conditions being as dismal as they are, computing the price of undeveloped land is an extremely challenging exercise."

Sunny Isles Development Company LLC with Daniel Kodsi and Joseph Kodsi purchased the 62,800 square foot property for $25 million, or $398 per square foot, in May 2003 for the proposed Paramount Beach luxury condominium.

The Paramount Beach was proposed to be a 232-unit luxury tower with six residences per floor excluding the penthouse floor.

All of the units were to be three-bedroom and four-bedroom residences that ranged in size from 1,925 square feet to 3,695 square feet.

Pricing was to start at $980,000 and go as high as $1.8 million, according to original project literature.

The Paramount Beach property is located at 16901 Collins Ave, situated immediately south of the newly opened Jade Beach condominium tower and the north of the Sands Pointe condominium.

The rectangular-shaped property, which is zoned for multi-family, high density residential, is assessed for $19.5 million, or $311 per square foot, by Miami-Dade County Property Appraiser.

Property taxes for 2007 and 2008 in the amount of $792,412.14 have are owed on the land, according to Miami-Dade County.

Immediately upon purchasing the property in May 2003, the owner, Sunny Isles Development Company LLC, immediately obtained a $13.04 million mortgage from the former Union Planters Bank, which is now Regions Bank.

In December 2005, an additional $1.96 million in financing was provided on the property to the former Union Planters Bank.

In November 2006, the owner of the Paramount Beach land refinanced the property into a $32.2 million loan with Fremont, which through acquisition would ultimately become iStar.

In February 2008, iStar modified the due date on the Paramount Beach loan to Feb. 1, 2009.

Some 10 months later in December 2008, iStar filed a Lis Pendens action against the borrower to initiate the foreclosure process.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter's blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database^TM .

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