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Economy / Business

Sale of Champlain Towers South property may prompt condo owners to sell their buildings

Verónica Zaragovia
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The purchase of the former Champlain Towers South property by a Dubai-based developer may lead other condominium associations in Florida to sell their buildings instead of their individual units.

When you face Collins Avenue at 88th Street, a huge gap stands out between two buildings, where the Champlain Towers South collapsed last June.

Now, a long black banner hangs along a fence in front with the names of the 98 victims. When it was unveiled earlier this month, Surfside Mayor Shlomo Danzinger acknowledged the tension between remembering and moving on in a message to victims' families.

"I would like to say this: The property has gone up for auction and in the coming years, new life will inevitably sprout forth on this site behind us," he said. "But I can promise you that your loved ones will never be forgotten."

Even if the banner is an important gesture, some families say the site shouldn’t be redeveloped while the investigation is ongoing.

"Nobody should be standing here, looking at that bloody site," said Pablo Langesfeld, whose daughter, Nicole, died with her husband in the collapse. "We got the key evidence over there. They should stay until the whole investigation is finished."

He also wants Florida’s lawmakers to pass a bill requiring additional inspections of older buildings to prevent another collapse. Lawmakers couldn’t agree on a proposal, though, in the most recent session, and the investigation into the collapse is likely to continue for years.

This property will be officially sold to DAMAC Properties, a Dubai-based developer. Michael Fay, chair of the capital markets executive committee for Avison Young, was appointed by the court overseeing the collapse litigation to lead the sale with his colleagues.

Fay says condo associations in South Florida are already showing interest in selling the land beneath their buildings instead of owners reselling their individual units. With the Champlain Towers South property selling for $120 million, it could lead to more interest in p utting properties on the market because it can be more lucrative to sell a large site for redevelopment than it is to sell the apartments individually.

"The older condos — the board of directors and the owners — go through assessments, structural engineering and property condition reports before they make a decision to sell a bulk sale," Fay said . B ut he added that a bulk sale could double or triple the earnings.

"If you had a property that was selling for $500,000 in a normal condo sale in the building, but you did a bulk sale and a redevelopment, that unit owner may get $1.2 to 1.5 million for their specific unit," he said.

Fay also expects condo associations to change how they operate in the shor t term and stay on top of maintenance needs.

At the time of the collapse, condo owners at Champlain Towers South faced large assessment fees to pay for structural repairs.

"When you're confronted with that kind of cost to keep yourself safe versus somebody dangling money out there for you — if everybody's willing to sell their units in that transaction, I think is going to be much more likely to happen," said Andrea Heuson, a finance professor at the University of Miami and director of the real estate programs at the University of Miami’s Miami Herbert Business School.

Maybe that’s a good thing, she adds.

"Because it's going to get the older buildings torn down and it's going to get newer, safer, more energy - efficient buildings put up," Heuson added.

Families of the victims in Surfside are coming to terms with redevelopment.

Pablo Rodriguez lost his mother, Elena Blasser, and his grandmother, Elena Chavez, in the collapse.

"It’s sad to know that there’s going to be a building and people are going to be living hopefully happy lives where I lost my mother," he said. "I lost my grandmother. People lost their loved ones."

Rodriguez knows that prime beachfront real estate wouldn’t stay empty long, but he’d like to see a memorial near the beach where his family liked to walk.

"Nothing fancy but something nice, permanent there for people to just be able to visit," he added. "Just remember."

Rodriguez and other family members of the victims say no one should forget what happened there in Surfside on June 24, 2021 —no matter how safe or energy-efficient the new building will be.

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