The developers of the proposed Ritz-Carlton Club condominium resort and timeshare in Miami Beach’s South Beach neighborhood have cancelled the three-tower luxury oceanfront project, blaming the decision on a lack of available financing, according to the Miami Herald.
A Miami-based entity called 2901 Beach Ventures LLLP, which includes the Lowenstein family’s Lionstone Development that already operates the Ritz-Carlton South Beach and luxury condo developer Edgardo Defortuna, planned to develop the high-end residence and timeshare resort.
"If a South Beach project on the ocean with a Ritz-Carlton flag cannot obtain competitive financing, one has to wonder what if anything is financeable today some two months after the Trouble Assets Relief Program bailout was passed," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC.
Preconstruction prices for the condominiums were starting at $900,000.
The project, which would have been the fifth Ritz-Carlton property to operate in South Florida, planned to incorporate the 12-story Seville oceanfront hotel built in 1955 into the complex. Plans called for the Seville Hotel to be restored with 45 units, and two new towers with a total of 86 units were to be built on the property.
The project called for the Ritz-Carlton Club to stand on 5 acres of land situated on the east and west sides of Collins Avenue at 29th Street, just north of Lincoln Road and south of the newly renovated Fontainebleau resort.
The project’s developer paid $25 million for the property in May 2005, and began presales the following year with a schedule to open the first units in late 2009.
Before the construction could begin, the South Florida real estate market came to a halt that was exacerbated by a complete pullback in financing by financial institutions and private lenders.
''There's no debt for development,'' Diego Lowenstein, a partner in the deal, is quoted in the Miami Herald. ``Lenders across the board are not doing anything.''
The Ritz-Carlton Club is not the first high-end condo-hotel project to run into construction financing challenges. The proposed St. Regis Bal Habour Resort & Residences obtained a $30 million loan from the Starwood Vacation Ownership Inc., which has ties to the development company, according to Miami-Dade County records.
In August, the St. Regis Bal Harbour Resort & Residences condominium and hotel began construction of a three-tower complex proposed to have 268 condominium units, 36 condo-hotel units, and 24 fractional units for sale to the public plus 182 hotel rooms and a presidential suite that will be owned by the developer, 9701 Collins Avenue LLC.
The development entity – 9701 Collins Avenue LLC – building the St. Regis Bal Harbour on an 8.9-acre site is a partnership between Starwood Resorts & Hotels Worldwide Inc. – which besides St. Regis also owns the brands Westin, W Hotels, Sheraton, Le Meridien and Four Points - and the nation’s largest condominium developer The Related Group .
The loan is secured by the waterfront land that had been long owned by the Sheraton Bal Harbour Joint Venture before the deed was transferred to 9701 Collins Avenue LLC in July 2007. Miami-Dade County’s Property Appraiser assessed the value of the land at $125.6 million, or $325 per square foot for the dirt, in 2007.
Prices start at more than $1,000 per square foot. An unknown number of units are under contract.
The development schedule calls for topping off the trio of 27-story glass towers in autumn 2009, and delivery in late 2010.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .
Copyright © 2008, Condo Vultures® LLC
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