Miami’s Brickell Avenue Hit Hard By Foreclosures

Brickell Avenue, Miami’s international banking center, is about to get a new moniker: South Florida’s foreclosure district.

Brickell Avenue is now home to three of the four condominium towers with the highest number of foreclosure proceedings filed in a South Florida building through the first three quarters of 2007, according to a new report from Condo Vultures™ LLC.

The Club at Brickell, with 54 foreclosures, holds the distinction of having the most foreclosures of any building in Miami-Dade and Broward counties. The Vue at Brickell, a condo conversion just two blocks away from the Club, ranks No. 3 based on 49 foreclosure actions. The Jade at Brickell, a nearby bayfront luxury building that had the highest number of foreclosures at the end of the second quarter, now ranks fourth with 42 actions.

The three Brickell towers account for 37 percent of the entire number of foreclosure actions filed in the top 10 buildings in South Florida, according to the Condo Vultures™ report. Condo Vultures™ produced the report using data generated by the courts of Miami-Dade and Broward counties.

On a dollar basis, the three Brickell towers account for more than $113 million in loans and fees owed to the lenders and condo associations that are pursuing foreclosure. The dollar figure represents 66 percent of the $171 million in default in South Florida’s top 10 foreclosure buildings.

“Brickell Avenue has evolved into one of the most attractive areas for discount buyers who are focused strictly on price,” said Peter Zalewski, a principal with the Condo Vultures™ LLC. “Given that at least another 12,000 units are scheduled to be delivered in the area within the next six months, I would expect the Brickell Avenue and nearby Downtown Miami area to be a focal point for discount buyers for future quarters.”

In the first three quarters of the year, Miami-Dade County had had 8,533 properties in some phase of foreclosure worth $2.37 billion to creditors. In Broward, the total was 6,812 properties totaling $1.41 billion, according to the report.

(Please note the number of foreclosure actions for each county is slightly inflated due to duplication in the court process. Normally each lender and condominium association files a foreclosure action against a debtor as soon as one of the other parties does so in order to protect a claim. When a single property has two lenders and a condominium association that is owed money, the number of foreclosure actions would total three even though it is only one unit. Duplications have been removed from the Condo Vultures™ top 10 list of foreclosure buildings.)

The only other South Florida area that compares to Brickell area in terms of the quantity of top 10 foreclosure buildings is a stretch of the barrier island from Miami Beach north to Sunny Isles Beach and west to Aventura. This stretch has three buildings that rank on the top 10 list of foreclosure complexes.

Oceanview, a condominium conversion on Collins Avenue in northern Sunny Isles Beach, ranks No. 5 on the list with 41 units in some stage of foreclosure totaling $13 million in debt owed to creditors, according to the report.

To the west across the Intracoastal Waterway in Aventura is the Parc Central Aventura condominium that ranks No. 7 based on the 34 actions filed that are worth $11.9 million.

Miami Beach’s neighborhood of South Beach is the location of the No. 9 foreclosure building, the Mirador. This condo conversion (next to the soon-to-be-opened Mondrian South Beach condo-hotel) on Miami Beach’s West Avenue ranks No. 9 with 27 units in foreclosure with $9.1 million owed to creditors.

These six buildings account for $139 million in pastdue debt, or 81 percent of the total amount owed to creditors in the top 10 foreclosure buildings.

The highest ranking Broward County project on the top 10 foreclosure list is the Palm-Aire Country Club in Pompano Beach. This northeast Broward community has had 53 foreclosure actions filed against its owners to rank as the second highest complex for court proceedings. Lenders are trying to recoup $5 million in troubled loans in the complex.

The only other Broward complex in the top 10 list is Sailboat Pointe in Oakland Park, which ranks No. 10 with 26 foreclosure actions totaling $1.4 million.

Despite the rapidly rising number of foreclosures, few properties are selling at the court house auctions. Pricing and financing are key reasons for the lack of buying activity.

“Many people don’t realize that it takes all cash that day to buy a property at a court house auction in South Florida,” Zalewski said. “Given that and concerns about overpaying, many buyers are purchasing directly from the bank once the property has failed to sell at auction. This way, financing can be obtained and the purchase price is typically no longer based on the original loan amount, which may or may not be realistic today.

“Remember, banks aren’t in the business of owning and managing residential properties, so their priority normally is to move the foreclosed property or REO [Real Estate Owned] fast.”

Peter Zalewski is a principal with the consulting firm Condo Vultures™ and the qualifying licensed Florida real estate broker of Condo Vultures™ Realty LLC. Peter can be reached at 800-750-0517 or by email at peter@condovultures.com.

Copyright © 2007, Condo Vultures™ LLC