Unfinished Coconut Grove Condo Project Transferred To Lender To Avoid Foreclosure
The developer of an unfinished 48-unit Coconut Grove condo project has handed over the deed to the site after its lender pushed for foreclosure.
Arbor Grove Development LLC, managed by Pembroke Pines-based attorneys Issac Kodsi and Steven Amster, took ownership of the property at 3034 Oak Ave. from an entity registered to Miami-based developer Nicolas Hamann, the South Florida Business Journal reported.
A $21M loan on the property was also transferred from Trez Capital to Fort Lauderdale-based Oasis Investment Trust.
The deed-in-lieu-of-foreclosure transfer is in exchange for the original lender releasing Hamann, doing business as 3034 Oak Park LLC, from personal guarantees on the loan, with Arbor Grove Development assuming repayment responsibility, according to the SFBJ.
The five-story Arbor Coconut Grove was being developed by a joint venture of Hamann’s Urban Atlantic Group and Oak Ventures, managed by Jeremy Waks. The developers bought the 36K SF lot for $5.3M in 2015, property records indicate.
Arbor was originally slated to deliver in fall 2018, with closings starting in early 2019.
Trez Capital filed an $18M foreclosure suit against 3034 Oak Park LLC and Hamann in August 2022, the SFBJ reported. Trez alleged in the suit that the borrower failed to repay a $20.7M construction loan by its maturity date and failed to comply with the terms of a forbearance deal.
Trez claimed that the borrower had missed payments of $750K in June 2022 and $4.25M in July 2022 that were negotiated as part of the agreement. The lawsuit named 10 contractors with active construction liens against the developer. The suit was dismissed in August.
Hamann told the SFBJ last year that the development was fully sold and construction was around 90% finished. The developers had been unable to close on the sale of individual condo units, which required a 40% down payment, because the project remains unfinished.
He was in talks with a new lender to refinance the property when the foreclosure suit was filed, he told The Real Deal, calling it unfortunate timing.
The development’s units included two-bedroom, 1,474 SF condos and 13 two-story townhomes. Douglas Elliman was the exclusive broker, with prices starting at $799K and averaging $900K in 2017.
Construction costs have risen significantly since the Arbor project broke ground. CBRE forecast in December 2022 that construction cost growth would be at 5.4% in 2023 after two years of double-digit increases.
Around 83% of construction materials experienced a significant cost increase through June 2023 compared to 2020, with the average price jumping 19%, according to data from Gordian reported by Construction Dive.
The Miami market and Coconut Grove neighborhood also saw condo prices leap in recent years, driven by an influx of new arrivals during the pandemic that has waned but not abated. Coconut Grove’s average condo sale price in the third quarter was $1.9M, up 39.2% from a year earlier, according to data from Douglas Elliman.
“We had a market up to 2019, and then we had a completely different market after the pandemic,” Enilda Rubin, a realtor with The Keyes Co. who has worked in Coconut Grove for 25 years, told Bisnow in May. “I sold a townhouse in 2019 for $625K, and the same townhouse today is $1M, $2M, $3M.”
