In another sign the South Florida condo market is recovering from the devastating real estate crash of 2007, the long delayed 24-story condo-hotel project – formerly known as the Trump International Hotel and Tower – on Fort Lauderdale Beach is reportedly “under contract” to be sold for an undisclosed price to a bulk buyer.
The new 298-unit project – that was originally scheduled to open in 2009 – is to be sold to an entity called Conrad FLB Partnership LLC that plans to invest $100 million to refurbish and reconfigure the project to feature 181 hotel rooms that will be managed by the Hilton luxury brand Conrad and 109 condo units that are to be marketed for sale, according to the Miami Daily Business Review.
News of the potential bulk deal comes months after the former Trump International Hotel and Tower had been shopped around to bulk buyers as “an extremely rare opportunity to acquire a brand new big beachfront asset with multiple entrance and exit strategies in one of South Florida’s hottest destination markets,” according to marketing literature.
Despite the delivery delays, the project “built by Donald J. Trump, Roy Stillman and Bayrock Group” on the west side of North Fort Lauderdale Beach Boulevard overlooking the Atlantic Ocean “has been well maintained and is in nearly move-in ready condition,” according to the bulk deal marketing literature.
If a bulk deal does occur as reported, the transaction of the storied project would push the Downtown Fort Lauderdale and Beach condo market that much closer to a symbolic end to South Florida’s boom-and-bust era that started in 2003.
CondoVultures.com is profiling condo trends in the third quarter of 2013 in the 10 largest coastal markets in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach counties beginning the week of October 14, 2013.
The Condo Vultures® Market Intelligence Report™ is scheduled to publish a 10-part weekly series that analyzes the markets of Greater Downtown Miami, South Beach, Bal Harbour / Surfside / Bay Harbor Islands, Sunny Isles Beach, Aventura, Hollywood / Hallandale Beach, Downtown Fort Lauderdale and the Beach, Pompano Beach, Boca Raton / Deerfield Beach, and Downtown West Palm Beach and Palm Beach Island.
In the Downtown Fort Lauderdale and Beach coastal market, the owner of record – 551 North FLB Marketing LLC based in Delaware – of the former Trump International project is said to ultimately be “ST Residential, a joint-venture between Starwood Capital, TPG Capital, WLR LeFrak and Perry Capital,” according to the bulk deal marketing literature.
In April 2012, the owner of record took title to the project after winning a March 2012 online Broward County foreclosure auction based on its “final judgment of foreclosure” in the amount of nearly $166 million, according to Broward County Clerk of the Court records.
As the 551 North FLB Marketing LLC gained control of the project, investors were focusing their attention on determining why the project was “plagued” even though “buyers spent an average of 38 percent more per square foot for a Trump unit than the other condo-hotels on the beach” in Fort Lauderdale, according to the Miami Herald.
Allegations surfaced of “problems far more serious than the slumping economy” as the cause of the delays for the project located on the west side of Fort Lauderdale Beach Boulevard, according to the article.
Claims have been made ranging from “allegations of tax fraud” to a threat of “being killed” made against an executive, combined with the alleged involvement of a “New York crime family associate” and an individual who was “arrested in Turkey on suspicion of organizing a prostitution ring of Ukrainian and Russian women” before the charges were dropped “on the first day of trial,” according to the Miami Herald.
Prior to the March 2012 foreclosure auction, the project was tied up in court for nearly two years after a notice of Lis Pendens – the first step in the foreclosure process – was originally filed in March 2010, according to Broward County records.
Originally slated to be the Trump International Hotel and Tower, New York real estate developer Donald J. Trump withdrew his name from the Fort Lauderdale Beach project in November 2010, according to the South Florida Sun-Sentinel.
As the battle for ownership of the former Trump International project progressed in the court, the Downtown Fort Lauderdale and the Beach condo market experienced a surge in sales of new units created since 2003, according to an analysis based on the Condo Vultures® Official Condo Buyers Guide To Downtown Fort Lauderdale And The Beach™.
As of September 30, 2013, less than four percent of the developer condos out of a total of nearly 5,250 units created during the boom era in the Downtown Fort Lauderdale and the Beach market are unsold, according to CondoVultures.com.
Since 2003, developers constructed and converted more than 45 projects of 15 units or more in the Downtown Fort Lauderdale and the Beach market to increase the existing inventory by more than 66 percent in less than a decade, according to the report.
The total number of new condo units does not include the former Trump International Hotel and Tower inventory as the declaration of condominium for the project has not been filed as of November 29, 2013, according to Broward County records.
The newly created condo unit total for the Downtown Fort Lauderdale and Beach coastal condo market does include the 171-unit Fort Lauderdale Residences project – known as the W Fort Lauderdale – on Bayshore Drive. The west tower of the two-tower W Fort Lauderdale complex was formally converted into a condo-hotel in March 2011 but the east tower remains a traditional hotel.
In 2012, the project’s unsold condo-hotel units in the west tower as well as the east tower hotel units were packaged together for a bulk deal but no transaction has been recorded as of November 29, 2013, according to Broward County records.
On the resale market in Downtown Fort Lauderdale and the Beach, there are currently nearly 200 condo units created since 2003 available for purchase as of December 1, 2013, according to an analysis by the licensed Florida real estate brokerage CVR Realty™.
In the first 11 months of 2013, buyers purchased more than 315 condos on the resale market that were created during the boom, according to Florida Realtors association data.
In the first 11 months of previous years, buyers purchased more than 300 boom-era units in 2012, about 375 units in 2011, about 380 units in 2010, and less than 265 units in 2009.
It is worth noting, at least eight new condo towers – including the Galleria Landings and Grand Birch – with nearly 350 units have been proposed for the Downtown Fort Lauderdale and Beach coastal market as of November 29, 2013, according to the Preconstruction Condo Projects Database™ powered by CVR Realty™.
The Downtown Fort Lauderdale and the Beach market stretches from Sunrise Boulevard south to State Road 84, and the Atlantic Ocean west to Northwest 7th / Southwest 4th avenues, according to the Condo Vultures® Official Condo Buyers Guide To Downtown Fort Lauderdale And The Beach™.
It is important to note there are various stages to a residential real estate transaction in South Florida.
A transaction begins when a property is made available for sale and ends when a title is conveyed from one party to another party as a result of the recording of a deed with the local government.
As part of the process, a property typically goes under contract and into a due diligence phase by which a deal can be canceled.
The CondoVultures.com new condo sales report is based on completed transactions where a deed is recorded and taxes paid as a result of the sale.
Condo Vultures® LLC is a real estate consultancy and marketing company based in the 225 Midtown Building at 225 NE 34th St., Suite 209B, Downtown Miami, Florida, 33137. Condo Vultures® LLC can be reached at 800-750-0517.
Don’t forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports to stay informed on the latest market trends and to find out about our various Condo Vultures® Seminars. Looking for a property at a deep discount? Take a peek at the Vultures Database™ or view our Video Library. Looking for bulk projects direct from developers or lenders? Visit the Condo Vultures® Bulk Deals Database™. Our new books, the Official Condo Buyers Guide to Miami™, Official Condo Buyers Guide To South Beach™, Official Condo Buyers Guide to Sunny Isles Beach™, Official Condo Buyers Guide to Downtown Fort Lauderdale and the Beach™, Official Condo Buyers Guide to Hollywood / Hallandale Beach™, Official Condo Buyers Guide to Downtown West Palm Beach™, and Official Condo Buyers Guide to Boca Raton / Deerfield Beach™, are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.
© Copyright 2013. Condo Vultures® LLC. All Rights Reserved.