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Business center with $17.7 million mortgage sells for $12 million

Homeowners are not the only ones that can find themselves underwater concerning loans. The Miami Lake Business Center found itself in similar circumstances and apparently only avoided foreclosure by selling the property for less than the loan balance.

The $17.7 million mortgage was sold by the bank from which the loan originated. The property was sold for $12 million to a couple of local groups in Miami Lakes. A bank in turn provided a $9.9 million mortgage to the new buyers. The $12 million sale price obviously was significantly less than what was still owed upon the mortgage.

The 143,384-square-foot office property was built in 1983. It was purchased in 2008 for $11.4 million and received significant renovations by the building owners. A foreclosure lawsuit was then filed in 2011.

Since the downturn of the real estate market in 2008, we've been seeing a great number of stories concerning short sales on homes. Attorneys often handle these sorts of matters because of the intricacies involved. A short sale is where the home is sold for less than one the homeowner owes to the bank.

The above circumstance would be very similar to such a circumstance except that instead here we are dealing with commercial real estate property. Also, while speaking of residential real estate we are usually speaking of deficiencies in the thousands of dollars. In a commercial transaction the deficiency could easily be in the millions of dollars. Still, in either case the parties could face a much greater loss if a foreclosure instead takes place and that's why some sort of action needs to be taken.

Source: South Florida Business Journal, "Miami Lakes Business Center sold below loan value," Brian Bandell, June 3, 2014

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