HOLLYWOOD, FL-BH III LLC, a private equity group, paid $308 per square foot for the Related Group’s construction loan on the last of the unsold developer units in the Hollywood/Hallandale Beach submarket, according to a report from Condo Vultures. Specifically, the group paid $160 million for the balance of a $226.6 million loan at the 200-unit Trump Hollywood.
"This is a milestone for South Florida’s overbuilt condo market,” says Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures. "The Hollywood/Hallandale Beach area has earned the distinction of being the first South Florida market to sell out of more than 99% of the total condo inventory built during the boom years.”
Broward County Clerk of the Court records show Trump Hollywood had 180 unsold units as of Nov. 19, 2010. With the Trump Hollywood condo bulk transaction, almost all of the 228 available developer units in the submarket are sold. Before the note sale, buyers only purchased 20 units in the 40-story tower completed in 2009. Those units sold for an average of more than $600 per square foot, according to Condo Vultures. Related executives would not comment for this story.
But Jack McCabe, principal of McCabe Consulting in Deerfield Beach, tells GlobeSt.com that just because the unsold units traded hands doesn’t mean they are really off the market. He often sees buyers looking to flip bulk buys or sell them in smaller packages.
“It’s not like these units were sold to owner-occupiers,” McCabe says. “We will have to see if they bleed over into the rental pool and what kind rental rates they are able to charge in the Trump building. I see this as being a revolving door rather than these units truly being taken off the market.”
Still, at least on paper, the Hollywood/Hallandale submarket looks better than some of its neighboring markets. With the exception of Ft. Lauderdale, Zalewski reports that the other five major condo markets in South Florida have double digit percentages of unsold developer units from the boom. Sunny Isles Beach, for example, still has 18% of its new condo inventory remaining, Condo Vultures reports, while 24% of new condo inventory in South Beach sits empty.
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