Miami Bank Starts Foreclose Proceedings on 167 South Florida Condo Units

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According to a new report from Bal Harbour-based Condo Vultures, a South Florida bank has filed to foreclose the remaining 167 unsold units in the Paradise at Dadeland condo project in the Miami suburb of Kendall.

Mercantil Commercebank, a Coral Gables-based institution with $6.8 billion in assets, filed a notice of Lis Pendens against the project's owner Dadeland 88 LLC with Antonio Alonso as manager in the second quarter of 2011, according to Miami-Dade County and Florida Secretary of State records.

The lender is seeking repayment of the outstanding balance from an original loan issued in 2006 for $35.7 million but later modified in June 2009 to a reduced mortgage amount of nearly $16.4 million, according to Miami-Dade County records.

In modifying the mortgage two years ago, Mercantil Commercebank provided a replacement of a replacement balloon promissory note that provided for a maturity date of May 23, 2013, according to Miami-Dade County records.

The terms of the mortgage call for 80 percent of the gross sales price of every unit transaction to be paid to the lender in an effort to repay the loan, according to Miami-Dade County records.

Constructed in 1965, the Paradise At Dadeland - previously known as the Dadeland Breezes - is a condo-conversion project comprised of eight low-rise buildings with a total of 306 residential units located on a 11.1-acre site on North Kendall Drive, according to Miami-Dade County records.

To date, the complex has sold 139 units with nearly 100,000 square feet of space for more than $28.1 million, according to an analysis of Miami-Dade County records.

Buyers purchased an average of nearly seven units per month between December 2006 and August 2008, paying an average price of $281 per square foot. Units sold in the price range of $246 per square foot to $318 per square foot, according to an analysis of Miami-Dade County records.

The remaining developer units have a combined 117,000 square feet of livable space for an average condo size of less than 700 square feet, according to an analysis of Miami-Dade County records.

With 14 locations in Miami-Dade and Broward counties, Mercantil Commercebank has a history in the South Florida region dating back to its start in 1979.

As of March 31, 2011, Mercantil Commercebank had $4.8 billion in deposits and nearly $3.9 billion in net loans and leases plus $64 million in loan loss allowances as of March 31, 2011, according to the Federal Deposit Insurance Corp.

Mercantil Commercebank's loan portfolio is comprised of $1.5 billion in real estate, $1.3 billion in commercial and industrial loans, $45 million in individual loans, and $1.05 billion in loans to other banks primarily overseas, according to the FDIC data.

At the end of the first quarter of this year, Mercantil Commercebank had nearly $329 million in noncurrent loans and leases on its books, according to the FDIC.

Despite the noncurrent loans and leases, Mercantil Commercebank has been growing its loan portfolio in recent years.

In 2006, Mercantil Commercebank had $2.6 billion in net loans and leases against $23 million in noncurrent loans and leases, according to FDIC data.

The following year in 2007, the bank's net loans and leases increased to nearly $3 billion against $36 million in noncurrent loans and leases.

In 2008, Mercantil Commercebank's net loans and leases increased slightly to more than $3 billion with $220 million in noncurrent loans and leases.

The following year in 2009, Mercantil Commercebank's net loans and leases increased to $3.2 billion with $415 million in noncurrent loans and leases, according to the FDIC data.

By 2010, the bank's loan portfolio had grown to $3.7 billion as noncurrent loans and leases dropped to $311 million, according to the FDIC data.

Along the way, Mercantil Commercebank's net income has been in black nearly every year since at least 2006 with the lone exception of 2009 when the bank recorded a net income of -$26 million, according to FDIC data.

It is important to note there are various stages to a residential real estate transaction in South Florida.

A transaction begins when a property is made available for sale and ends when a title is conveyed from one party to another party as a result of the recording of a deed with the local government.

As part of the process, a property typically goes under contract and into a due diligence phase by which a deal can be canceled.

Condo Vultures' report is based on completed transactions where a deed is recorded and taxes paid as a result of the sale.

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