Four Stalled Projects Come Back from the Dead

Icon Brickell, Miami

A whopping near 1,800 of the 23,000 condo units built in downtown Miami from 2003 to 2010 are concentrated in a single project: Icon Brickell, developed by The Related Group at the end of 2008. For roughly a year, the lender and owner were at a standstill, with The Related Group unable to sell units. “Most people wrote the project off as being dead in the water because there were so many units, and it came to market so late, and there was a year lag time where nothing happened,” says Zalewski of Condo Vultures Realty.

But the developer didn’t give up: Related rented a portion of the units, and, in the spring of 2009, Icon Brickell got a boost from the GSEs’ decision to buy up mortgages in projects previously considered too risky. Fannie stepped in and approved mortgages for two of the project’s three towers. In December 2009, Related reached an agreement with HSBC, the lead lender on the two towers, to sell units at $400 a foot, which is a 30 percent discount off original pricing, Zalewski says. “Low and behold, the Fannie Mae approval is put in place, the lender decides to get actively involved, and now you have a building that is not yet vibrant but is showing signs of life. Last time I looked, the closing rate was in the 120-unit range.”