Real Estate Pro Articles

Mercantil Takes Back Miami-Dade Commercial Foreclosed Homes

[Valid RSS feed]  Category Rss Feed -
By : John Cutts    99 or more times read
Three commercial and residential development projects in the southern part of Miami-Dade County were the targets of three foreclosure lawsuits filed by Coral Gables-banked Mercantil Commercebank recently, increasing the number of commercial foreclosed homes in the area.

The biggest of the projects is a 146-acre agricultural site in West Perrine which is owned by Eureka Palms Partnerships, the entity formed by Coral Gables developer Pedro J. Adrian and his firm Adrian Development to manage the project. Adrian bought the property in 2005 for $9.1 million and then requested Miami-Dade County officials to expand the county's urban development boundary so he can build 292 houses on the site.

Adrian however withdrew his application when county commissioners rejected his request, reiterating they would not allow additional residential projects outside existing UDB areas. For this project, Adrian was hit with a $11.2 million foreclosure suit from Mercantil Commercebank.

Another Adrian development project in foreclosure is a 149-acre site in Homestead managed by another Adrian partnership named Avocado Groves Partnership. Adrian bought the property in 2005 for $11.3 million. In the lawsuit, Mercantil was foreclosing it for $10.1 million. The site remains an agricultural area, according to county zoning regulations.

For the two planned projects, Adrian was hit with two foreclosure lawsuits from Mercantil seeking a total of $21.3 million in unpaid development loans.

The third foreclosure lawsuit filed by Mercantil Commercebank was against the developer of the 198-unit Royal Home Villas in Homestead. Royal Home bought the property for only $2.1 million in 2004, but it is now in foreclosure for a total debt of $10.1 million. The developer began building townhome units on the 21-acre site in 2007, but was not able to complete the project.

In the second quarter, Mercantil Commercebank posted a loss of $14.9 million, a reversal of its performance in the first quarter, when it earned $1 million. Its parent company, which is based in Venezuela, has infused the Florida-based bank with $65 million to help the bank solve its loan problems.

The bank's losses were largely due to a $47.8 million allocation to reserves for future losses in loans. Mercantil reported that 10.24 percent of its loans, equivalent to $318 million, were not gaining interest as of the end of June and that 10.02 percent of its loans or $299 million were noncurrent loans as of the end of March.

According to Mercantil CEO Millar Wilson, the continued decline in real estate values adversely affected the bank, but he added that strong capitalization will help the bank weather the downturn.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

Related Articles

Print This Article
Add To Favorites




© All rights reserved to Real Estate Pro Articles