Terra Beachside Villas sees turnaround

Terra Beachside Villas broke ground seven years ago and for the past two years have sat unoccupied. This once distressed Miami Beach condo project has new owners, lower prices and local officials have given permission to begin occupancy.

According to Gregory Freedman, a principal at BH III, construction has restarted and more than half of the units have buyers. The developers for the Miami Beach condos located at 6000 Collins Avenue received a Temporary Certificate of Occupancy this week which allowed them to finalize contracts so new owners can move in. Residences at Terra Beachside Villas are priced between $250,000 and $685,000 and buyers have been found for almost 65% of the 117 units.

Freedman said that BH III, a partnership between Freedman, Charles Phelan and Daniel Lebensohn, has seen interests rise since the prices were significantly reduced from the original 2004 prices.
Mark Pordes, president of Pordes Residential, the sales arm for Terra said, ``we’ve really exceeded our expectations, considering that we had construction still going on. Our goal is to be completely sold out by year's end and that's what we're shooting for.''

Shortly after its lenders foreclosed in 2008, Freedman said he decided to buy Terra Beachside Villas believing if the price was right there would be a strong market for new condos in Miami even in a recession. He added, ``There is no competition for us at our price point.''

BH III did not reveal how much it paid to purchase Terra Beachside Villas, which features a 400 foot long atrium, 18 foot ceilings inside units and a 3 story cone-shaped lifestyle center. These new condos in Miami Beach got underway at the early part of the housing boom and sold all of its units during construction but problems began as soon as the project designed went up.

Hurricanes in 2005 stalled the construction and increased material costs and then the recession took hold. This left the project, which was already under-funded, looking for more cash and fighting liens from contractors. Construction on the nearly finished project stopped when the banks chose not to put more money into the project. In December 2008, the lenders decided to foreclose after buyers demanded their deposits back and lawsuits were filed.

Since construction restarted, Pordes' sales team launched a campaign from a trailer located on the property, aim at buyers in countries like Brazil, Colombia and Venezuela. Almost half of the buyers are from South America, yet another example in which foreign buyers are helping Miami’s real estate market.
Sales at Terra Beachside Villas are priced far below what the original developers asked for six years ago, between $600,000 and $1.5 million. In May, the last 25 units at the Fountainbleau Sorrento were bought by BH III for $7.2 million, about $288,000 per unit. Four of those units have already been purchased, according to Freedman.

Contributed by MLR Realty