Related

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The lenders and the project’s developers, CityPlace South Tower, LLC, an affiliate of The Related Group, reache d an agreement in which the new partnershipl will acquire title to all unsold units inthe project. Scoti Capital, a subsidiary of , filed a foreclosure lawsuit against CityPlace South Tower Wednesdau in Palm Beach CountyCircuit Court. The complaint was basedc on the $134.7 million mortgage the bank and its partners gave the developein 2006. The project is 100 percen t complete and all construction debts and obligation havebeen satisfied, Jorge Perez, chairman and CEO of the Miami-based Related said in a presas release.
CityPlace South Tower contractedx to sell 367 units while the building wasundeer construction. But when the building opened in summertof 2008, many buyers walkede away from sales contracts. So far, 39 unitsz have closed. Due to these unit buyer defaults, Relatec said in a news releas that it was necessary for the developer to renegotiater the terms of its construction loan withthe lenders, which was schedulex to be repaid in July through proceeds from unit Alicia Cervera, president of Related Cervera Realtgy Services (RCRS), the exclusivse sales agent for CityPlacwe South Tower, said in the news releasee that the successful transition between the develope r and the new partnershipp provides significant benefits to current and future buyers.
“The lenders are not interested in generatingh sales in the buildingthrough large-scale ‘bulk’ salesa and are working with RCRS to ensure that CityPlacw South Tower’s integrity is fully protected and that it continues to offer a first-class owner experience,” she said. Brad president of Wellington-based real estate brokerage firm Atlantic is working with the lenders as a He said CityPlace SouthTowedr couldn’t repay the mortgage on time because most buyersa didn’t close on the Scherer said the lenders will adjust the prices downward in response to the market and leasre some units, but they won’t do a massive discount or convert the building into rentals.
They will financially supporyt the condo association and maintainb CityPlaceSouth Tower’s amenities, he added. The Related Groupo will be compensated for continuing to managdthe building, Scherer said. That’s a far cry from most where the developer and its principals are oftenm held liable forthe losses. “I don’t think the recognition of losshas occurred, or maybw it will never occur,” Scheree said. “If the property market comed back and the property is managed ina first-class manner, there may not be a loss.” Accordingv to court documents, the partners in the $134.
7u million loan that will take control of CityPlacre South Tower are: Bank of Nova $23.7M Cherish Thompson, the Miami-based attorney who representd Bank of Nova Scotia in the complaint, didn’ty immediately return a call seeking comment.