Winthrop Realty Trust and hedge fund Paulson & Company foreclosed on five resorts. One of them is Miami’s Doral Golf Resort & Spa and Donald Trump has agreed to take it against a payment of $170 million. The agreement is being filed with the US Bankruptcy Court in New York and according to Michael Ashner, CEO of Winthrop, the transaction should be completed by the first quarter next year. It is a luxury property and the Trump Organization was very keen to get it and pushed really hard to close the deal as quickly as possible.
Doral Golf Resort & Spa was one of five luxury properties on which Winthrop and Paulson foreclosed in January and put them into Chapter 11 in February. The properties put together had the maturity value of mortgages to the tune of $1 billion and an additional mezzanine debt of $525 million. Winthrop and Paulson have negotiated with the mezzanine lender MetLife Inc. to reschedule the debt that allows the reorganization to continue till September 2012. Ashner explained that they will still go for an auction for the Doral property in order to explore the possibility of a better offer, but at the moment there aren’t any bidders other than the Trump Organization.
Doral Golf Resort & Spa, one of the world’s greatest golf resort is a 650 acre property and Trump is planning to pump in over $150 million in a comprehensive renovation program. The Trump executives declined to comment on the details of the renovation program. Donald Trump himself insisted that it is not a discounted price if you take into account the investment required to bring the resort back to its original grandeur. Trump will pay all cash for the transaction and expects renovations to take two years.