The Real Deal Weekly Dirt: Condo Buyouts Fall Apart

Deals across South Florida are falling apart, put on hold or tangled in litigation. 

That’s partly due to the complicated nature of the deals. Typically one buyer is negotiating with up to hundreds of sellers, and the bulk purchase can take years to close. 

The environment has also gotten more challenging because it’s harder for developers to lock in financing and equity partners. 

But developers are attempting more condo buyouts and terminations across South Florida, brokers and attorneys tell me. Jeff Cohen, who works on buyouts almost exclusively, says they will remain “increasingly complex and rare.” 

“You’re going to see more [deals] fall out than you’re going to see close in the next nine to 12 months,” he says. 

That could be happening at Amethyst, an oceanfront building in Miami Beach where developer Camilo Miguel Jr. has tied up a majority of units. Miguel’s firm, Mast Capital, has only closed on eight units and is now being sued by the association and a pair of sellers over the attempted takeover. Developer David Martin of Terra also stepped into the situation, sending out offers to the owners of the building. 

If a developer can pull it off — as Miguel did next door when it acquired La Costa, and as Related Group, Two Roads and plenty of other developers have done in the past — they stand to make millions of dollars. Otherwise, it wouldn’t be worth the “brain damage” caused by the lengthy and oftentimes frustrating process, one broker tells me. 

Even if there is short-term pain due to market conditions, developers will continue to target older buildings sitting on prime real estate. Soaring insurance costs and legislation passed after the Surfside condo collapse makes it more expensive for condo owners to remain in their units. 

Former reporter and current market analyst Peter Zalewski says that all you have to do is drive around to identify the ideal targets — older buildings with rail balconies and large surface parking lots.

“All of those are going to be terminated at some point,” he says, “either because of insurance or special assessments.”

What we’re thinking about: What’s next for Banyan Cay Resort and Golf Club in West Palm Beach, now that Westside Investment Partners backed out of its purchase of the property? Send me a note at [email protected]. 

CLOSING TIME 

Residential: Mark Bellissimo’s ex-wife, Katherine Kaneb, sold her equestrian estate at 13893 Gracida Street in Wellington to Maharshi Properties LLC. The 20-acre property sold for $21.9 million. 

Commercial: Greystar paid $92.1 million for the apartment complex at 10000 Alternate A1A in Palm Beach Gardens. PGIM Real Estate sold Gardens East by Atrium for nearly $206,000 per door. 

— Research by Adam Farence 

NEW TO THE MARKET 

Cher’s former Miami Beach estate hit the market for $42.5 million — nearly 10 times her sale price in 1996. Canadian financier James Eaton and his wife, Cindy, paid $17 million for the 12,450-square-foot, six-bedroom mansion at 64 La Gorce Circle in 2020. Dina Goldentayer of Douglas Elliman is the listing agent. 

A thing we’ve learned 

Location Ventures allegedly used funds earmarked for a Coconut Grove co-living and co-working project to pay One Sotheby’s International Realty commissions for sales generated at another completed development, according to former CFO Greg Brooks.

Elsewhere in Florida 

• Nearly two dozen ball pythons have been caught roaming a St. Augustine neighborhood. The invasive snakes are primarily between three to four feet long. 
• The Florida Department of Education essentially banned Advanced Placement Psychology classes in the state, telling the College Board that the class violates the state’s new Florida’s Parental Rights in Education Act, a.k.a the “Don’t Say Gay” law, over its lessons regarding sexual orientation and gender identity. More than 28,000 Florida students took AP Psychology last year, NBC News reports. 

Nine of the top 15 overvalued home markets in the country are in Florida, according to the Beracha and Johnson Housing Index, the Sun Sentinel reports. Those top metros obviously include Miami, and other cities on the list are Tampa, Cape Coral, Lakeland, Orlando and Jacksonville.