08/27/08

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Condo woes sink Hollywood project

Brokers eager to move the vacant tower known as the Mediterranean in Hollywood are offering buyer incentives, including zero down.

The condominium crash is throwing a wrench in Downtown Hollywood's revitalization efforts.

Condo projects that once saw people lining up around the block for pre-construction deals are now struggling to close. Some may sit dark despite the buzz of restaurants and retail shops surrounding them.

"Nervous investors seek to sell and are flooding the market with inventory," says Paul Davis, president of Mid-State Appraisals in Clermont. "Meanwhile homeowners and foreign investors are opting to stay put in expectation of further price reductions in the near future."

The Mediterranean at Young Circle got caught in the fray, Davis explained. The 24-unit mid-rise sits 95 percent complete at 1800 Jackson Street, just south of a bustling Young Circle. One-bedroom, one-bath units are listed at $389,000 while two-bedroom, two-bath units with dens are running nearly $475,000.

Developed by Mediterranean LLC, the property marketed itself with "old world charm" and "leading-edge technology." But despite developer incentives – including a 3 percent seller's contribution, zero down and a 4 percent forgivable grant program – the property is in distress.

"The condo market was playing musical chairs and the Mediterranean had no room to sit when the music stopped," says Agnes Stalmach of RE/MAX Executive Realty in Hollywood, the agent who represents the property. "The building is beautiful, but the developer's timing was bad."

Despite some struggles in Downtown Hollywood, Yizhak Toledano, CEO of Aventurabased Sky Development Inc., doesn't see any reason for panic. "The market will come back soon and with that, the buyers and the financing," he says. "The name of the game in real estate is to stay alive."

For Mediterranean LLC, whose partners are Coral Springsbased builders Bradley Gross and Frank Luciano, staying alive means cutting its losses.

"The Mediterranean will be sold and converted to an apartment complex," says Stalmach, revealing she is negotiating with several possible buyers. "There will be a happy ending for the troubled Mediterranean. We won't see it sitting empty."