December 17, 2009

Looks like a group of lenders – led by HSBC Holdings and Bank of America – are going to become the new owners of the Icon Brickell condo and hotel complex in downtown Miami, according to the Wall Street Journal.

“The negotiations are almost finished,” Mr. Pérez said in an interview Wednesday. He said he hoped the agreement would allow Related Group to remain the manager of the three-tower complex near downtown Miami, featuring décor and sculptures designed by Philippe Starck. Representatives of HSBC and Bank of America declined to comment on the talks.” WSJ

Due to the over glut of projects, condo developers have been slashing prices by up to 50 per cent over the past year in order to increase buying, but many of them are not getting the required cash flow to meet their loan payments.

But, at the Icon, over the three buildings, only 117 purchasers have actually closed. Yikes! It will be interesting to see how the new owners plan on getting rid of the remaining units.

“In the downtown Miami and neighboring Brickell areas, more than 22,000 condos have been built in the past four years, or more than twice the number added over the previous four decades, says Holliday Fenoglio Fowler LP, which advises real-estate developers and investors.” WSJ

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