Note Deals Take Off in South Florida
When Robert Lechter heard Banco Popular North America was selling a note secured by a recently completed condo tower in Miami’s Brickell area, he knew it was no time to be timid. Lechter says he won the bidding with a $10.2-million offer for an $18-million note secured by the 62-unit Brickell Station Village.
Besides offering $1 million more than the second-highest bidder, he agreed to pay cash and to put down $2 million soon after Banco Popular accepted his offer. “I pursued it very hard,” says Lechter, principal of REMS. Group, a Hollywood-based developer. “In these transactions, you have to be aggressive.”
The condo’s developer, Royal Explore Development, signed the project over to Lechter’s company at the same time REMS closed on the purchase of the note in mid-August. The total cost per unit was about $164,500.
“It was almost like a short sale,” Lechter says, adding that he plans to rent out the units for three years and sell them when the market improves. Lechter is among a growing number of investors who are buying distressed notes at big discounts as lenders step up efforts to shed bad assets and cut the cost of carrying unwanted projects.