Well, well, what’s new this week amongst the Miami Beach real estate news & gossip wire… Trump Towers I, II & III losing the “Trump” name!? What a shock, yet unsurprising. The latest news is that over 80 buyers (speculators) have hired an attorney seeking the cancellation of more than $100 Million in condo contracts and the return of $20 Million in buyer deposits. The uncertainty came when the Condo Docs and Sales Contracts did not specify the Trump name yet held firm with the Trump sales & marketing materials of the brand name condo developments Trump Towers I, II & III in Sunny Isles. The lawsuit filed in Miami Dade Circuit Court claims the developers used the celebrated Trump name to attract the buyers but did not obtain a license agreement for the associations or purchasers to use the Trump name, making it likely to change names once the developer relieves themselves to the condominium board.
“But according to the suit, the billionaire’s name can only be used temporarily and for promotional purposes and may be changed once the units are sold out, the buildings are completed and the developers are no longer associated with the project.” DailyBusinessReview.com 6.12.08
The argument for withholding the Trump name comes with an apparent 36% premium on the Trump brand name compared to other similar condos. Additionally, the lawsuit claims Trump Tower cut back on promised amenities, including the size of promised condos, lower quality kitchens, and the lack of a resort-style swimming pool. The suit claims buyers were duped into overpaying for their units because the developer operated a fraudulent and misleading resale program by manipulating resale asking prices in Trump Tower I to support vastly inflated sales prices for Trump Tower II and Trump Tower III condos units.
“Let’s say someone bought a unit in Tower I for $700,000 and wanted to resell it for $900,000,” The person would sign an agreement with a minimum price of $900,000, but the brokerage firm and the developers would list it for $1.4 million. So when buyers looked at Tower II they said, ‘Wow, the prices for these units are going up fast.”
The developers have, in fact, monopolized resales by restricting buyers/speculators from listing their condos through the (MLS) Multiple Listing Service. Today there are 40 units listed on the MLS, with a few coming from Trump Tower II (15800 Collins Avenue). Prices are very good for new luxury oceanfront real estate with 2 bedrooms starting in the high $ 500s and selling in the low $ 500s while 3 bedrooms on high floors start around USD $900. Today’s highest asking price is unit #1201 at $2.297M, just under 3,000 square feet (This agent/owner is dreaming!).
The new Trump Tower I (16001 Collins Avenue) signage out front clearly represents Trump Tower I and seems to be a costly investment only to see it removed. I tend to think it will remain Trump Towers, but also I’m interested in seeing what happens over the next few years. Remember the ‘White Diamond’ now known as ‘Akoya’? It could happen… Let us know what you think about it or if you’re involved in this project! Oh, btw, if you haven’t subscribed to this blog yet, do it now! If you’d like new blog updates once available, you can be notified by email or RSS feed (see upper left column) every time a new posting occurs. 1.888.38.DREAM