Nov. 18 (Bloomberg) -- Lenders foreclosed on Trump Hollywood, a 200-unit luxury condominium project in Hollywood, Florida, ending an almost two-year debt restructuring by developer Jorge Perez’s Related Group of Florida.
The $225 million mortgage on the 41-story oceanfront tower, completed in 2009, was part of $2 billion in troubled loans at closely held Related Group as of early last year, Matt Allen, chief operating officer of the Miami-based company, said yesterday in a telephone interview. Juanita Gutierrez, a spokeswoman in New York for HSBC Holdings Plc, which led the lending group that held the note, declined to comment.
“We’ll be a healthy company now that we’ve restructured this debt,” Allen said. The note was bought by a third party, whom Allen declined to identify.
Florida real estate has yet to recover from the market collapse that began in 2007. The state ranks second behind Nevada in foreclosures and seized homes, RealtyTrac Inc., an Irvine, California-based real estate data seller, reported Nov. 11. Home prices in the Miami area are 47 percent below their December 2006 peak, according to the S&P/Case-Shiller index.
Related Group, founded in 1979 by Perez and New York developer Stephen Ross, will continue to manage and market units in the Trump Hollywood, Allen said. As of yesterday, sales had closed on 25 of the 200 units, which were listed at prices ranging from $900,000 to $7 million, said Patrick Campbell, the Trump Hollywood’s project manager.
Allen said he didn’t know how deeply prices will be cut on the condos, which all face the Atlantic Ocean and come furnished with granite countertops, Sub-Zero refrigerators and Miele ovens.
Tomas Colsa, director of Lemmus-Inver Mexico Real Estate, a brokerage in Guadalajara, Mexico, said one of his clients is delaying the purchase of a condo at the building because of the foreclosure.
“We almost signed a deal for $2.779 million,” Colsa said in a telephone interview today. “Our client would have been very upset if he knew prices were going to go down or the ownership of the property was going to be changing hands.”
Donald J. Trump, who licensed his name to the building, is not a developer of the project, located 22 miles (36 kilometers) north of Miami.
Perez, who owns about 75 percent of Related Group, has reached restructuring agreements with syndicates led by HSBC, Bank of America Corp. and Scotia Capital Inc. since banks stopped financing his condo sales in response to plunging prices and tightened lending standards.
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