Affiliates of Lehman Brothers Holdings, in a $301.2 million deal, took control of the remaining 336 units in the Miami Beach real estate residential and hotel condominiums, Canyon Ranch.
The Miami Beach real estate units that spanned over three towers were transferred for an average of $672 a square foot which does not include the amount paid for the additional land and common areas.
A spokeswoman for New York-based Lehman Brothers, Kimberly MacLeod, which is undergoing bankruptcy court restructuring, said the Canyon Ranch units were acquired as deeds in lieu of foreclosure. There was no cash transferring hands.
To avoid the long and costly process of a foreclosure lawsuit such deals often are done. The deal can happen quickly but the lender must pay documentary stamp taxes on the amount of debt forgiven for each unit.
MacLeod said in an e-mail, "Lehman plans to continue to operate the property as it has been run to date." "We are selling units and have implemented an end-loan mortgage program to assist in this. There continues to be strong interest from buyers post Lehman taking ownership."
She added, Canyon Ranch is still operating on the Miami Beach real estate property.
In April 2008, a subsidiary of Lehman Brothers, LB Carillon Construction, last modified two mortgages covering Canyon Ranch at a combined $418.7 million. They were set to mature in April 2009.
Lehman Brothers supplied $239 million of that loan with borrowings from Fortress Credit Corporation which in June 2009 ordered repayment from Lehman Brothers, according to its bankruptcy case. The bankruptcy judge authorized Lehman Brothers to repay the $142 million remaining on that loan so Fortress would not take complete control of the mortgage and leave Lehman Brothers with nothing, in June.
Canyon Ranch closed out 229 of its 583 Miami Beach real estate units prior to the deal with Lehman Brothers, according to Condo Vultures. The sales grossed $189.6 million, or about $828,160 a unit.
The Canyon Ranch project is one of many South Florida developments financed by Lehman Brothers that is now caught up in its bankruptcy case.
Contributed by MLR Realty
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