After a summer of dire predictions, Corus Bank's failure late Friday was almost an after-thought. The Chicago-based bank gorged itself on condo loans during the real estate boom, then hemorrhaged cash as many of the projects it financed sat empty.
But the bank's demise has serious ramifications for condos in South Florida. The FDIC has seized Corus's assets -- at a cost of $1.7 billion -- and will be selling them in the next month. That means the mostly-empty Tao Sawgrass towers in Sunrise will soon have a new owner. Experts have predicted that any new owner will start selling and renting those condos at greatly reduced prices, lowering the value of the few units (roughly 52 out of 396) that have sold.
Meanwhile, Trump International Hotel & Tower in Fort Lauderdale faces an uncertain future, because Corus lent it $139 million, and the building has yet to finish construction or open to the public. The Edge in West Palm Beach also has a mortgage from Corus, as does the Ivy in Miami and at least 11 other condo projects in South Florida, according to the South Florida Business Journal.
Having a new owner or lender is probably good news for these condos in the long run, because Corus has been flailing around uselessly for months now, keeping buyers and sellers in limbo. But if the new head honcho at a place like Tao decides to stop paying for maintenance and upkeep of mostly-empty buildings, you can bet the few unlucky residents will be screaming.
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