A foreclosed property sale involving a 118-unit condo project near Howard University in Washington, D.C. will be carried out next month.
The condo project called The Floridian was foreclosed by lender Bank of America after developer, Kady Development of Lanham, failed its maturing loan payment. The slow sales of the condo units failed to convince the bank to extend the due date of the two development loans taken out. The loans were supposed to be paid on October 1 last year. As of date, only about 30 condo units were sold.
Kady Development took out $44.8 million from LaSalle Bank in 2006 following its $8-million purchase of the land for the condo complex that features colored glass, stainless steel and limestone loft condos. Two years ago, Bank of America acquired LaSalle Bank, including Kady?s mortgage note.
After BofA filed its foreclosure action on the Floridian, a third-party investor bought the mortgage note from the giant bank. The third party, which is still unidentified, has been pursuing the foreclosure. The balance on the mortgage note was $31.8 million.
Because other commercial and residential projects around the Floridian failed, the Floridian is now surrounded by unfinished projects and vacant sites that were previously targeted for redevelopment when the Floridian project started and provided the spark for lofty development plans.
One 750-unit project called Atlantic Towers that was planned to replace the adjacent Atlantic Plumbing Supply never took off, failing to help the owners of Atlantic Plumbing save the property from foreclosed property sale.
Other condo projects facing difficulties, like Vaughan Place, have been converted into complexes that feature both rental and condo units.
Nonetheless, despite the difficulties of the Floridian complex, real estate analysts do not think it will offer rental units. Kady representatives insist the level of condo buyer interest in the Floridian is still high and that the units were meant to be upscale.
In February, when The Floridian was not yet in foreclosure, the per-square-foot price was more than $500. According to Kady, the mortgage note was acquired at a price level that would not allow the new buyers to sell at lower than $500.
Despite difficulties related to The Floridian condo project, Kady Development is still a strong force in the property market and continues to be positive about its current and future projects.
According to public records, The Floridian will be auctioned off at a foreclosed property sale in January next year by Alex Cooper Auctioneers.
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