The big turnover: Florida condo projects get new owners in FDIC auction, area sale
Wake up and good morning. Becalmed condominiums across the greater Tampa Bay area and Florida suddenly have some new and motivated owners -- good news that fresh eyes and capital are coming into the state to revive struggling condo projects.
An investor group led by real estate development firm Starwood Capital Group's Barry Sternlicht (see AP photo) just won a Federal Deposit Insurance Corp.-managed bidding contest to buy condo projects that had belonged to the now failed Corus Bank of Chicago. Corus, which specialized in condo lending -- especially in Florida -- was seized by federal regulators last month.
Here's the FDIC's press release announcing the deal, which attracted eight bidders but ultimately includes the FDIC as a majority partner in the condo transaction. Starwood and its business partners agreed to pay $554 million for a 40 percent equity stake in the loan pool; the FDIC keeps a 60 percent stake worth $831.6 million.
The FDIC deal is unusual enough for the government agency to offer a diagram to show how the 60-40 percent split transaction would work.
The deal, which includes investors TPG (Texas Pacific Group) Capital, Perry Capital and WLR (as in Floridian billionaire Wilbur Ross) LeFrak, gives Starwood the Corus portfolio of 112 construction loans, more than two-thirds of which are in default or are in foreclosure. Starwood will have to decide how to deal with the troubled projects and their developers as well as those headed for default. Here's the Wall Street Journal story and the New York Times story on the deal.
Venture has not confirmed the specific condo loans included in the Starwood package but these are the dominant condo projects in the Tampa Bay area that Corus backed and, in most cases, was forced to take back for nonpayment before the bank failed:
* Element, Tampa. Corus loaned $84.3 million.
* Arbors at Branch Creek Tampa.Corus loaned $52.6 million.
* Arbors at Carrollwood Tampa.Corus loaned $47 million.
* Tuscany at International Plaza, Tampa.Corus loaned $23.5 million. Used to be known as SummerWalk at Westshore.
The Starwood deal is not the only one to bring in new condo players. Minto Communities LLC, a U.S. subsidiary of Canadian-based Minto Group and a newcomer to southwest Florida, purchased a long controversial, 352-acre condo project on Perico Island formerly known as SevenShores (see rendering). The project just south of Tampa Bay had been owned by St. Joe Co. Minto says it plans to eventually complete the project at the existing densities and heights approved for Jacksonville-based St. Joe.
Here's a Venture blog posting from March outlining St. Joe's woes with Sevenshores.
Terms of the deal were not disclosed, but Minto said it represented the company's largest acquisition on this side of the state to date, according to the Sarasota Herald-Tribune. Perico island lies between Perico Bayou and Anna Maria Sound and is bisected by State Road 64, a route connecting Anna Maria Island and mainland Bradenton.
So new blood, new perspective, new capital and new federal subsidizing of Florida's hopefully reviving condo market.
-- Robert Trigaux, Times Business Columnist