South Florida Commercial Foreclosures Increase In 2024
South Florida has seen a surge in commercial foreclosure lawsuits this year, as the industry grapples with multiple challenges.
According to the Business Journal’s 2024 Biggest Foreclosures list, there were 25 commercial foreclosure lawsuits filed in the past 12 months, each involving at least $2 million. These cases, filed up until October 30, include only those that were not dismissed or settled. Additionally, four more lawsuits exceeding $2 million were filed but were too small to be included on the list. This marks a significant increase from the 2023 list, which featured just 17 lawsuits, with a smaller proportion seeking large sums. Last year, only one case exceeded $30 million, while this year, six cases have surpassed that threshold.
A key factor contributing to this rise is the ongoing impact of high interest rates. Many borrowers with adjustable-rate mortgages are facing increased payments, and refinancing loans at higher rates has become more difficult, particularly for those with low-rate loans set to expire. For property developers, the combination of high interest rates and rising construction costs has made it harder to move forward with projects, especially as the maturity dates of land loans approach. Financial troubles at some parent companies of loan sponsors have also added to the pressure.
In terms of property types, office buildings were the most common target for foreclosure lawsuits, making up eight of the top 25 cases. Development sites followed with seven lawsuits, while multifamily properties accounted for four.
Not every foreclosure lawsuit results in the loss of property. Of the top 25 lawsuits, only four have resulted in borrowers losing control of their properties. Many other cases have been resolved through settlements or dismissals, allowing the borrowers to retain ownership. These include cases involving Jade on Bay LLC for apartments in North Miami, West Boynton Auto Services for an automotive building, BWSR Real Estate and former Miami Dolphins player Brandon Marshall for an athletic club in Weston, Orengo Investments for apartments in Opa-Locka, and Boynton Partners for condos in Boynton Beach.
Source: SFBJ
