June 04, 2010
By: Eric Kalis – Daily Business Review (Miami)
Maefield Development, which has been busy trying to save its massive City Square project in Miami, sold 46 residential condos and two commercial units in Capri South Beach for nearly $31 million.
Operating as MaeCapri, Indianapolis-based Maefield sold the units for $30.79 million to Capri Residential Properties, according to Miami-Dade County records.
Maefield chief executive Mark Siffin declined to discuss the bulk sale when reached for comment on Friday.
Maefield only sold 20 of 69 residential units before the bulk sale, according to Miami-Dade County records. With the sale to Capri Residential, Maefield has three unsold residential units remaining.
Capri Residential paid per-unit prices ranging from $157,398 to $1.5 million, according to Miami-Dade records. No financing was recorded with the sale.
Maefield also sold a pair of condos at The Strand on Ocean for $10 million to Capri Residential affiliate Strand Commercial Properties, according to Miami-Dade records. The two condos total 12,488 square feet.
Capri Residential obtained a $4.5 million loan from Sabadell United Bank for the Strand condos.
Miami attorney Diane Hernandez, who represented Capri Residential in the purchase, did not immediately return a call for comment.
State corporate records do not list a principal for Capri Residential. Calls to a phone number listed by state records were not immediately returned.
Maefield was a “victim of the times,” said Miami Beach broker Mark Zilbert, who was not involved with the Capri transaction.
“When Capri came to the market, people were shying away from new purchases,” Zilbert said. “There was a lull for a couple of years. Had the project premiered a year or two earlier, all the units would have sold and you would have never seen a bulk sale.”
Bulk condo sales have become the norm in South Florida as developers of stalled projects face continued pressure from lenders. Many recent bulk deals have occurred in downtown Miami and Brickell Avenue areas, not Miami Beach.
Maefield apparently did not sell the units to satisfy an antsy lender. Miami-Dade County did not record any foreclosure actions against Maefield. Fremont Investment & Loan of Brea, California, gave Maefield a $60.45 million loan in May 2005. The loan was assigned to iStar Financial in December 2008.
Maefield “was probably sitting there with a project that had not been selling well,” Zilbert said. “There’s a breaking point every developer has. The buyers we spoke to about Capri were kind of afraid about who will be there” with so few prior closings.
Zilbert predicted the wave of bulk condo deals in the region will soon pass as buyers become more comfortable with pricing.
“We won’t see many more bulk deals,” Zilbert said. “Individual buyers are regaining confidence. They are not going to overpay, but in some cases the fear of paying a premium to get something special is diminishing.”
Capri Residential should be able to support the purchase price by renting out some of the condos immediately and then selling them over a two- to five-year period, he said.
“It should be a damn good investment,” Zilbert said.
For Maefield, the Capri bulk sale generates much-needed revenue as the company attempts to close on the purchase of 10 acres next to the Miami Herald building in downtown Miami for the long-discussed City Square project.
Miami attorney and developer Pedro Martin signed a contract in March 2005 to buy the land from then-Herald owner Knight Ridder for $190 million and immediately flip it to Maefield for $230 million. The sale’s closing has been delayed numerous times since then.
Current Herald owner McClatchy has extended the purchase agreement several times, including last January when it moved the closing deadline to January 2011 in exchange for an additional $6 million deposit. Maefield and Martin would lose $23 million in two deposits and a termination fee if they fail to close on the purchase.
The most recent proposal for City Square is an eight-story parking garage topped by a pair of 200-foot video billboards. The garage and billboards, which Siffin said in May were “always part of the project,” have been pushed to center stage as a proposed retail center and twin 70-story condo towers take a back seat.