The first luxury condominium on Millionaires Row, the Caribbean Miami Beach, has been purchased by an affiliate of the New York City-based Melohn Properties. Consisting of two buildings at 3737 Collins Avenue, the north tower is the historic six-story Caribbean Ocean Hotel and the south tower is newly constructed with 19 stories.
Architect Kobi Karp designed the Caribbean and the brother of legendary pop icon Madonna, Christopher Ciccone, designed the interiors. The units were priced from $500,000 to $8 million. The oceanfront location and low number of closings, six out of 103 units according to Miami-Dade real estate tax records, seemed perfect for investors.
The Melohn affiliate investor acquired the property by purchasing the delinquent $127 million mortgage note from Chicago-based Corus Bank. The South Florida Business Journal reported that industry watchers said the note was sold for about $50 million after the FDIC approved the sale, but that no foreclosure lawsuit was filed in the transaction.
The Journal reported that the deficient Corus Bank had given Caribbean Group Owners a $127.7 million mortgage to renovate the hotel into a Miami Beach condominium. The bank faces a risk of failure of delinquent condo construction loans, so they sold their mortgage on August 19 to 3737 Caribbean Partners.
The developer, a partnership between Christa Development and Bluerock Real Estate, said that they have voluntarily turned over the Caribbean Miami Beach to the new lender. Vice President Frank Christa said, “The new lender is in charge of it.”
The CEO of Condo Vultures Peter Zalewski, who has looked at the project on behalf of potential buyers, called the Caribbean the brown jewel of Corus Bank’s loans portfolio. Zalewski predicted, “The owner will flip these units immediately. They probably have the ability to burn through most of them during the tourism season.”
Thirteen sales that were closed at the Caribbean by the developer went for an average of $848 per square foot, which generated $21.4 million revenue. “The Caribbean was the most desirable bulk play in South Beach because so few projects there were in distress,” Zalewski added.