Downtown Dadeland Project Developer Goes Bust
November 24, 2007 by Lucas Lechuga
This past week, the Daily Business Review published a very interesting real estate news story. The article, entitled "Condo Meltdown: Historic Failure in Kendall Project", revealed that the developers of the Downtown Dadeland project, located in Kendall, have decided to walk away from the project and are handing the development over to the lender.
The article opens with the following two paragraphs:
The developers of Downtown Dadeland are walking away from the massive mixed-use project in Kendall and handing over the unfinished complex to construction lender Goldman Sachs Commercial Mortgage.
Gulfside Development principals Jackson Ward and Stefan Johansson say they can no longer afford to make payments on the $224 million construction loan and won't fight a foreclosure suit filed two weeks ago in Miami-Dade Circuit Court.
The rest of the article goes on to say how this could be one of the largest defaults to have ever occurred in Miami-Dade County. I think this is just the beginning. It will be interesting to see how many similar stories will be published within the next couple of years.
Investment groups, bulk buyers, vulture capitalists - whatever you wish to call them - will have a field day in Miami in 2008.
Is there any way to re-post that DBR article? I’ve tried to access it through the link but its only available to DBR subscribers.
Hi,
I was afraid this was going to happen, I work in the area and it seems like a ghost town at night.
Wonder what will happen to the other buildings around, like Toscano and the two towers that I forgot the name now.
The big question is why this is not front page in the Herald.
I always wondered who would want to buy one of those condos.
Now I know the answer: almost nobody–at least not for those absurd prices. Maybe at 60-70% off those prices you’ll get some buyers.
But according to their website, there are only “37 units remaining”. So, hurry up and buy one before they’re gone!
BB,
I also noticed the “37 units remaining” on their website. Too funny! I’m not going to pretend to be an expert on the Kendall condo market, but from what I remember condos there were being sold at Brickell prices. It didn’t make sense to me then and still doesn’t make sense to me now. I guess, after several years, it didn’t make sense for the developer either. Good luck to Goldman Sachs on selling this loan! They’re going to take a bath on this one.
Ignacio,
The reason why this story isn’t on the cover of the Miami Herald is because they don’t have great reporters like Paola Iuspa-Abbott. I pay less attention to the Miami Herald and more attention to the Daily Business Review and the South Florida Business Journal. The Miami Herald, to me, is yesterday’s news.
Funny pic 🙂
The Herald has probably made a deal with the local real estate community- no bad press in exchange for continued advertising.
The sad part is its a really nice community. The restaurants have been booming with business, so hopefully someone will takeover this place and fix it up. I live in the area and moved from Brickell. Its the only area in Miami where you can walk to almost everything. Its been very popular and the buildings are starting to fill up (Toscano and Metropolis). I fill up every 2-3 weeks because I can walk everywhere.
“the buildings are starting to fill up”!? Are you serious? I live in the metropolis (I rent) and this building is nowhere near “full”. The Toscano might as well be hollowed out inside because every apartment except for the smaller building is pitch black. Same thing with DD. The property is beautiful but the prices are outrageous. 2/2 is 350+. When these units go down to 175-225 I would be interested. The thing these developers need to understand is that keeping the prices high in an effort to recoup losses is simply not going to work. They need to get these units sold so that the area can be energized with people. Then the retail side of this problem can help to even out the losses. Trying to mitigate the already obvious losses they are going to take by inflating the price of the units is bad business. They need to accept the losses as a byproduct of this mortgage crisis and set the example by making these units affordable for those looking to buy. By the way, there should be a clause in every closing contract that the unit must be a PRIMARY RESIDENCE for at least 1 year before it can be rented.
I really think that the architect or an the Developer made a horrible jod the units do not have a living room or if you used it as a living room you will not have a dinning room and with thyose prices either for rent and to buy i do not think people is going to be so absurd to paid for that.
im one of the many contractors who got screwed by these guys good to see them out of the business bad for me