Miami Beach, Florida

Terrace Towers

144-unit Miami Beach conversion

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Location: Miami Beach, Florida
Units: 144
Year built: 1960
Year converted: 2020
Underlying mortgage: Yes - paid off through conversion

The challenge

Unit values were too low to refinance the building and pull out the necessary millions to complete the restoration. As a co-op, units were selling at a 40% discount to neighboring properties. Several previous attempts to convert to condo ownership had failed.

The mortgage on the building was coming due in 5 months when Hutton was finally engaged. Within that period, an additional $4.0 million was needed to start the structural facade restoration ordered by city and county building officials.

As a co-op building, units were selling slow, at low prices and with no financing available.

The outcome

Hutton created a structure to convert all 144 units to condominiums without requiring any out-of-pocket funds from the ownership. The plan also included a back-stop arranged by Hutton to cover any shortfall in funding the conversion from contributions from owners, which assured 100% participation by owners.

Within 5 months of starting the process, Hutton delivered on all points. Building was converted to condos, funding completed and restoration started. Due to the pandemic, the restoration was delayed and has recently restarted.

The project record reports condominium sales at roughly 50% above former co-op prices, alongside broader financing availability.