The Trump Hollywood (Deanna Dent, Sun Sentinel )
November 18, 2010|By Paul Owers, Sun Sentinel
Lenders have foreclosed on Trump Hollywood, a 40-story oceanfront condominium unveiled last year by Jorge Perez and Donald Trump.
The move is the latest blow for the high-profile development duo amid the worst housing bust in decades.
Prices in the lavish project ranged from $1.3 million to $7 million. In August 2009, Perez said he had commitments from buyers for more than two-thirds of the units, but there were closings on only 25 of the 200 condos.
Analysts doubted Perez and Trump could sell the digs featuring Italian cabinetry and wine fridges when condo buyers are looking for bargains.
Trump on Thursday distanced himself from the $355 million project. Though he is listed as a developer on the Trump Hollywood website, he said he simply licensed his name and was not involved in sales.
"The job is beautiful," Trump said. "I was a little surprised at the timing myself. Jorge is a professional and he took a big chance."
Perez could not be reached for comment Thursday.
The $225 million mortgage was part of $2 billion in troubled loans at Perez's The Related Group of Miami as of early last year, said Matt Allen, chief operating officer.
"We'll be a healthy company now that we've restructured this debt," Allen said.
BH3, a Miami-based company, bought the note for about $160 million, said Mark Pordes, a real estate broker who handled the transaction. It's the largest bulk condo deal in Broward or Palm Beach counties since 2008, when CondoVultures.com, a consulting firm, started keeping track.
Related will continue to manage and market units at Trump Hollywood, Allen said. Pordes said he doubts the new owner will cut prices drastically because it wants to maintain the "integrity" of the project.
"It's going to take a lot of creative marketing," Pordes said. "Every palm tree is perfect … all the amenities are perfect. It's just a pristine asset, in my opinion."
Juanita Gutierrez, a spokeswoman in New York for HSBC Holdings, which led the lending group that held the note, declined to comment.
Last month, Perez said he was having trouble working out a deal with a consortium of Trump Hollywood lenders.
Perez said then he wanted to slash prices but the lenders were hesitant to do so.
"It's just a matter of adjusting prices to the new reality," he said at the time.
As condo sales and prices tanked over the past few years, Related negotiated deals with lenders on several projects statewide, including the Icon Brickell condo in downtown Miami.
Related said last summer it handed control of the CityPlace South Tower in West Palm Beach to an investor group as part of a "friendly foreclosure." A Dallas-based company recently bought the remaining 305 unsold units for $63.9 million.
Earlier this month, Trump said he's no longer affiliated with the $200 million Trump International Hotel & Tower on Fort Lauderdale beach. It's now facing foreclosure.
More than 100 people paid 20 percent deposits to buy condos in the Fort Lauderdale tower, where prices ranged from about $500,000 to more than $3 million. Many of the buyers are suing, saying developers misrepresented Trump's involvement.
In 2007, Trump and Perez agreed to build a luxury condo in West Palm Beach, but the project was shelved before it began.
The condo crash was destined to occur because Perez and other developers sold too many units to investors, who didn't live in them, said Lewis Goodkin, a housing consultant based in Miami. It created a false demand that drove up prices.
"Your name, be it Perez or Trump, wasn't going to be the thing you could hang your hat on," Goodkin said. "The market is still driven by economics."
Information from Bloomberg News was used in this report.
Paul Owers can be reached at powers@SunSentinel.com or 561-243-6529.
