WORLD PROPERTY CHANNEL ®

(BAL HARBOUR, FL) -- A single institutional buyer in October  is expected to purchase the $4 billion balance in condominium-related  assets recently seized by the Federal Deposit Insurance Corp., according to Condo Vultures LLC, the Bal Harbour-based brokerage and research organization that daily tracks the South Florida leisure market.

Peter Zalewski

"The Corus Bank failure has many opportunity funds salivating in South Florida," says Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®.

"When regulators announced they would be absorbing a $1.7 billion loss related to the Corus failure, many funds immediately realized that the gap between the ask price and the bid price could be bridged."

Corus Bank, the third largest condo construction lender in South Florida during the latest boom, was shut on Sept. 11 by regulators who stormed the 96-year-old institution's headquarters on Chicago's north side.

The, FDIC, which insures accounts up to $250,000, was appointed the receiver to oversee the liquidation of Corus' $7 billion in assets and $7 billion in liabilities.

Several institutional investors have been identified in published reports as possible suitors for the condominium construction loan portfolio.

Caribbean Miami Beach condos

"We understand from our relationships that all offers are due the week of Sept. 21 and the FDIC intends to unload the Corus loan portfolio to a single buying group by the end of October," Zalewski says.

"Given the variety of product and expansive geography of the projects in the portfolio, we envision a scenario where the eventual buying group retrades a portion of the loan portfolio on an individual project basis."

The FDIC has already sold off Corus' deposits and $3 billion of its assets to MB Financial in Chicago, leaving $4 billion in primarily commercial loans - including condominium construction loans in South Florida, Las Vegas, San Diego, and elsewhere.

Corus Bank's South Florida Portfolio Stands At 2,300 Unsold Condo Units

Nearly 2,300 condominium units built in South Florida by developers using construction loans provided by the recently closed Corus Bank remain unsold, according to a new white paper report from Condo Vultures® LLC.

Developers of nine projects with a combined loan amount of $1.2 billion have not yet closed 2,299 units, or 24 percent, out of the 3,035 total units constructed in South Florida using Corus financing, according to a special Condo Vultures report produced using public and private records.     

Zalewski says the Corus loan portfolio in South Florida would have been larger if not for two recent note sales that closed just prior to the bank being seized.

In the most recent deal, a Miami development and management company purchased at a deep discount the outstanding debt of a construction loan for the troubled 28-story Onyx on the Bay condominium tower in Greater Downtown Miami, according to a recent CondoVultures.com report.

In purchasing the note secured by 40 unsold units, the buyer, Hyperion Onyx Partners LLC, steps in the place of the lender that initiated foreclose proceedings against the project in May 2009.

Condo Vultures reports Hyperion Onyx Partners, a newly formed Florida corporation with ties to the Miami-based Hyperion Development Group that developed more than 1,000 condo units in Greater Downtown Miami, paid an undisclosed price -- rumored at $155 per square foot -- for the outstanding balance on the original $46.1 million construction loan, or an average of $303 per square foot, provided in October 2004.

Prior to the Onyx deal, a newly created Miami real estate company acquired the construction loan on the remaining 90 units with 155,000 square feet in the new Caribbean Miami Beach oceanfront condominium project in South Beach, according to a recent CondoVultures.com report.

The recently incorporated 3737 Caribbean Partners LLC bought the remaining balance of a nearly $128 million construction loan for reportedly between $50 million and $55 million, according to the South Florida Business Journal.

A spokesman for the Caribbean South Beach developer told the South Florida Business Journal  the project had been returned to the bank.

With the Onyx note sale, bulk buyers have acquired a total of 806 units with 946,000 square feet for nearly $199 million, or $210 per square foot. A dozen of the 14 closed bulk deals have occurred in Miami-Dade County, according to the Condo Vultures® Bulk Deals Database.

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( "Fontainebleau Las Vegas Asks Bankruptcy Judge for Quick Ruling on $3B Lawsuit, June 11, 2009.")

("Miami Condo Developer Gambling on Construction of New Multi-Million-Dollar Downtown Tower, Aug. 28, 2009.")

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("On Again-Off Again Penthouse at Setai South Beach Returns to Market at $24M, Sept. 3, 2009")

("Big-Name Condo Investors Await Corus Bank's Pending Seizure by FDIC, Sept. 4, 2009.")

("Bulk Buyers Score Big on Miami Condo Re-Sale Front, Sept. 4, 2009")

("Corus Bank Trophy Caribbean Miami Beach Condo Sold After Owner Returns Key to Lender, Sept. 7, 2009")

("Fortune International Takes Big Hits on 2 South Florida Real Estate Deals," Sept. 7, 2009")

("Unfinished Multi-Million-Dollar Miami Condo-Retail-Office Project $196M in Debt. Sept. 7, 2009.")

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