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November 26, 2007

One of Miami-Dade’s Largest Defaults Of All Time

I don't get any joy out of these stories - I just think you have to know what is out there though so you can plan accordingly. Tonight, as I was in my evening rant about just what the hell is happening around the globe financially and wondering what we might have to do to make a living, possibly in the very near future, my wife asked me how bad did I think it could get. My reply was that nobody knows - but that it would have to be at the least as bad as the S&L mess - and probably much worse. Then I read this:

"The developers of Downtown Dadeland are walking away from the massive mixed-use project in Kendall and handing over the unfinished complex to construction lender Goldman Sachs Commercial Mortgage.

Gulfside Development principals Jackson Ward and Stefan Johansson say they can no longer afford to make payments on the $224 million construction loan and won’t fight a foreclosure suit filed two weeks ago in Miami-Dade Circuit Court.

The project’s failure is the largest yet in the current real estate downturn, which has hit the overdeveloped condo market especially hard.

The development across the street from Dadeland Mall was planned to have 416 condos and 125,000 square feet of retail space in seven mid-rise buildings. Four of the towers were completed this year, but three still need some minor construction work before closings can start. The project was the centerpiece of redevelopment along Southwest 88th Street near U.S. 1.

“If not the largest one, it is one of the largest defaults in all time in Miami-Dade County,” said David Dabby, president of Coral Gables-based real estate research firm Dabby Group.

Defaults during the savings and loan crisis in the late 1980s and early 1990s were generally under $50 million, he said."

I was never good at math - but $224 million is a lot more that $50 million. How many of these projects are out there? At the least hundreds - maybe thousands? Maybe tens of thousands? It would be interesting to see the numbers on these kinds of projects - not just in the US but world wide.

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