$ 15 million loan foreclosure filed on Little Havana multi-family building

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(Apartments.com, iStock / Illustration by Steven Dilakian for The Real Deal)

The developer of the Columbus on Fifth building in Miami’s Little Havana neighborhood has been slapped with a $ 14.7 million foreclosure action, the second such case to involve the property in three years.

Columbus Apartments, linked to Miami-based Suncoast Construction Group, is accused of defaulting on a loan it took to build the 72 Columbus on Fifth apartments at 514 Southwest 22nd Avenue.

COF Investment sued Columbus Apartments in Miami-Dade Circuit Court last month, alleging it was paying $ 9.7 million in principal; $ 61,730 of accrued interest; and $ 4.9 million in default interest at the end of 2021, with an annual interest rate of 24.5% on all overdue amounts, according to the complaint.

Columbus originally secured a $ 9.3 million construction loan in 2017 from Ocean Bank to construct the eight-story building. It was completed in 2019 on 0.6 acres.

COF Investment bought the loan in December from Ocean Bank and filed for foreclosure shortly thereafter.

Mortgage foreclosure requests have become more frequent over the past year, but have mostly focused on hotel properties, many of which have yet to make a comeback after the 2020 foreclosure and in light of the news. Omicron variant. In contrast, the South Florida multi-family market flourished as a result of strong demand driving rents up.

The mortgage foreclosure lawsuit follows a lien foreclosure case that resulted in Columbus Apartments losing ownership of the property, but is fighting it on appeal.

In that case, Miami-based construction firm MJM Structural filed a lawsuit in Miami-Dade Circuit Court in 2019, claiming she owed him $ 18,900 for work she performed on Columbus the fifth. MJM sued Suncoast Construction, Columbus Apartments and other affiliates who previously owned the property.

A July auction in the case led to the Columbus on Fifth being sold to Lake Worth Development Trust for $ 502,000, court records show. In October, Judge Beatrice Butchko ordered a possession subpoena in favor of Lake Worth Development.

As the new owner, Lake Worth Development is also named as a defendant in COF Investment’s mortgage foreclosure lawsuit. COF claims to have an interest in the apartment building which replaces the Lake Worth Development apartment building.

Still, ownership is in dispute as Columbus Apartments are appealing Butchko’s orders.

Justin Kaplan, an attorney for Columbus Apartments, admitted that the entity defaulted on the loan because once it lost ownership of the property “it made no sense” to continue paying.

Lake Worth Development has a “potential problem,” both in light of its property’s attractiveness and because it has been sued by COF Investment, Kaplan said. Lake Worth Development would likely have to take out a loan to pay off the overdue mortgage, but that will be difficult, he said.

“Very few lenders, if any, would lend against property that a borrower might not own properly. As this foreclosure lawsuit and appeal make their way through the courts, the default interest is increasing by over $ 6,500 a day. The longer this lasts, the higher the likelihood that any equity in the property will be extinguished, ”Kaplan said.

It is not known who runs Lake Worth Development, as it is not recorded in the state’s business records, although its address is linked to a Delray Beach apartment complex owned by Dallas-based Crow Holdings. .

Lake Worth Development attorney Cory Carano declined to disclose the entity’s key executives and said the trust had been “diligent in its efforts” to pay off the mortgage. But once COF Investment bought the loan from Ocean Bank, problems arose.

Lake Worth Development “has been and remains ready, willing and able to assume or satisfy the loan, but since the loan was awarded to COF Investment a dispute has arisen over the exact amount of interest due on the loan” Carano said in a statement. statement sent by email.

COF Investment’s ownership is also unclear, Carano said, as it remains to be seen “whether it is related in any way to the previous owner, Columbus Apartments.”

COF Investment is not registered in the state enterprise registers.


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