The Real Deal Miami

Delray condos up for auction

September 19, 2008 09:31AM

Unsold condos at Pineapple Grove Village in Delray Beach will be sold at an auction after a loan formerly held by Lehman Bros. led to a foreclosure lawsuit against the developer. Pineapple Grove Village LLC, a subsidiary of Wellington-based Bainbridge Cos., still owns 83 units, which will go on sale September 25 at 10 a.m. at the Palm Beach County Courthouse in West Palm Beach. The condo conversion project sits at 325 Northeast Second Street. The 160-unit development first went on the market in 2005, selling units for $300,000 to $800,000. Bankrupt Lehman Bros. wrote the developer a $45.9 million loan in 2005 for the project. Later that year, Allied Irish Banks, of Ireland, signed on as a co-lender.  Lehman Bros. and Allied Irish filed a foreclosure lawsuit in June. They then sold the mortgage note to Pineapple Grove Acquisition, which is managed by New York-based investor Schultze Asset Management.