Anatomy of a Vulture Bulk Deal

A pair of veteran Miami real estate investors obtained a 145-unit apartment complex near the popular Dadeland Mall in Kendall with development rights for more than 700 new units in an all-cash deal that works out to a more than 60 percent discount.

Les Chalet Investments LLC, with Tomas Cabrerizo and Maurice Cayon, has subsequently obtained a $7.2 million mortgage on the five-acre property at 8215 Southwest 72nd Ave, which is located just north of Kendall Drive, south of the Snapper Creek Extension and west of U.S. 1/South Dixie Highway.

"This is a text book Vulture deal," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. "The buyers purchased the mortgage at a deep discount off of the original loan amount and immediately proceeded to foreclose. Upon obtaining clear title to the property through the court system, the buyer then took out a commercial loan with terms that allow for the rents to more than cover the expenses."

The whole deal took less than a year to materialize, according to public records. Here is a blow-by-blow description of how it happened.

In June 2007, Dadeland Nadlan LLC purchased the five-building Les Chalet apartment complex with 127,192 square feet of living area for $35.5 million. This price worked out to $244,828 per unit and $279 per square foot.

Part of the reason for the rich premium for a 1967 project was the fact the property has development rights for two 25-story towers with 726 units, according to press reports. The surrounding areas experienced a condo tower boom during the real estate run up.

The seller was Premier Urban Properties with Alejandro Robles as president, according to the Florida Department of State.

The Miami-Dade County Property Appraiser assessed the project the year of Dadeland Nadlan's purchase in 2007 at $18.4 million, or $126,897 per door or $145 per square foot. In 2008, the project was assessed at $23.2 million, or $160,000 per unit or $182 per square foot.

Dadeland Nadlan LLC bought the property byway of a $25 million mortgage obtained in June 2007 from Fortress Credit Corp. in New York. The mortgage worked out to $172,414 per unit or $197 per square foot.

In February 2008, Dadeland Nadlan LLC's managing member Elie Berduo, who was spearheading the project, died of a heart attack while in Israel.

Berdugo, a real estate developer and contractor who founded the successful Boca Raton-based EB Developers in 1993, owned thousands of residential square feet in Florida and even a Manhattan hotel site.

EB Developers was a successful company that built "luxury homes and garden-style condos, and, in recent years lined up $1.5 billion in projects," according to press reports.

Berdugo's passing proved to be too much for the development company to overcome.

By May 2008, Dadeland Nadlan's lead lender Fortress sold the mortgage to Les Chalet Investments LLC for an undisclosed price.

Les Chalet Investments LLC moved to foreclose the property in September 2008, claiming it was owed about $16 million in unpaid debt service, attorney fees, and administrative costs. The outstanding amount works out to $110,345 per unit or $126 per square foot.

In October 2008, the Miami-Dade Circuit Court issued a final judgment of foreclosure at an amount of $14.9 million, and set an auction date of Dec. 19, 2008.

No one bid on the property at the courthouse so the lien holder / lender - Les Chalet Investments LLC - took control of the complex on Jan. 5, 2009.

On Feb. 13, 2009, Sovereign Bank in New York provided Les Chalet Investments LLC a mortgage on the complex in the amount of $7.2 million, or $49,655 per unit or $57 per square foot.

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™ .

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