Jacksonville Condo Complex to Hold Fractured Sale in Auction

Jacksonville Condo Complex to Hold Fractured Sale in Auction
Jacksonville, FL's Ocean's Edge condominium community is next to find themselves forced to perform a fractured condo sale to raise capital as its lender, KeyBank National Association, forecloses on the project.

KeyBank took possession of the property mid-December 2008 after a judge determined that they were still owed over $21 million from the project. Now, 107 of its 184 units along with the clubhouse and other amenities will be auctioned as a single sale on March 9.

Although some of the units were selling up until late 2008, many of the potential buyers backed out of their contracts as the real estate market continues to evolve, which has not been an uncommon occurrence lately.

Most likely, the Ocean's Edge condo found themselves in what has been an all too common circumstance in the condo market- the developer is approved for a large loan after preselling a certain amount of their condos, but as the residential market began its decline, many who initially signed agreements backed out which did not allow for the lenders to be paid back for the loans as quickly as expected. In October 2004, LeCesse Development Corp. bought the property for $23 million, but took out $36 million in loans from KeyBank to convert and renovate the apartment complex into condos.

The company overseeing the property auction has seen a recent increase in fractured condo sales, six of which are located in Florida and are currently being prepared by the company. In this case, Ocean's Edge is expected to be a great opportunity for someone what has the resources and the time to turn the units into a profit. The property is only blocks from the beach and was completely rebuilt in 2006. So far, the auction is rousing interest from not only Florida, but also the entire US and even from some international investors.