Corus Bank, the Chicago lender that staked its fortune on the condominium boom, was teetering on collapse. The Bank provided loans to some of the highest profile condominium conversion projects through the state of Florida.
But for the significant market downturn in the condominium conversion project marketplace, Corus loans were generally secured by outstanding real estate backed assets. Christian Tyler Properties (“CTP”) identified the loan secured by the Palms of Monterrey multi-family apartment project as a potential investment opportunity. The note had a face amount of $69.0 million. CTP believed it could acquire the note at a significant discount. The problem was that during the negotiations, the FDIC issued a cease and desist order against Corus Bank. The opportunity was to work through this loan document purchase at a fair, but significant discount.
Christian Tyler Properties (“CTP”) sought and negotiated the purchase of the underlying note secured by the property at a significant discount from Corus Bank, an FDIC controlled bank. CTP coordinated capital investments to form a purchase group for the note that consisted of Behringer Harvard, a commercial real estate company (Behringer Harvard Opportunity REIT II, Inc., a public non-listed real estate investment trust) and DeBartolo Development, LLC (“DeBartolo”).
CTP, together with Behringer Harvard and DeBartolo, acquired the senior mortgage debt, at a significant discount, secured by the Palms of Monterrey, a 408-unit, resort-style, multi-family community situated on a 28-acre site in Fort Myers and is now fee title owner of the asset. The Property boasts larger than average floor plans that are ideal for single or family living and are also suitable for future condo conversion. Apartment amenities include unparalleled views, alarm systems, controlled access, extra storage, vaulted ceilings, dishwasher, garbage disposal, washer/dryer, walk-in closets, cable ready, and screened patios and balconies. This 408 unit Apartment Complex includes amenities such as a clubhouse, covered parking and detached garages, gated access, fitness center, business center, playground, indoor racketball, tennis court, two heated pools with a hot tub and poolside WIFI. The Palms of Monterrey is less than a mile from Health Park Medical Center, an area employment center that includes a 270-bed acute care facility and the only comprehensive children’s health care center between Tampa and Miami. Residents are also only minutes from the gleaming white sands of Fort Myers Beach and the Sanibel and Captiva Islands, as well as many hospitality-industry employers.