It is now official.
The merger of Cay Clubs with Keys Hospitality Acquisition Corp has been terminated.
As a result, Cay Clubs may have extreme difficulty in avoiding bankruptcy - given they are already late on payments and near default on large loans.
According to filings with the Securities and Exchange Commission (SEC), the merger was terminated because of "The deterioration of Cay Clubs' market in Florida, the liquidity problems it is facing and the recent unavailability of jumbo mortgages for potential condo-hotel buyers have made it highly unlikely that certain closing conditions contained in the agreement could be met."
Cay Clubs is among the largest developers in the Florida Keys - having bought numerous properties at the peak of the real estate market.
Should Cay Clubs become enter bankruptcy, the implications for the Florida Keys could be significant.
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4 comments:
Significant indeed! Here in Key West one sees the ongoing deterioration of properties bought during the binge.
I see a fire sale coming.
Bob,
I've heard of communities on the mainland that were built at the height of the real estate bubble that are now falling into disrepair, becoming vandalized with graffiti, and being broken into. These communities are becoming instant shambles. Meanwhile, the few residents who live there are now living in an unsellable new community.
Here in Key West I too see the for-sale properties (and many many absentee-owned properties) falling into disrepair.
I wonder if in 5 years, when the paint starts to peel, if Old Town will start to resemble the community I fell in love with many years ago.
And Bob - thanks for your comment. I appreciate your opinion!
I enjoy your blog. We are old residents of KW returning. Our little cottage in old town is comfortable and paid for. We have calmly watched the furor and the mass installation of parking meters. HA! Yet the charm is still there and we love it. . Thanks for keeping us informed.
Bob Myers - I'm glad you enjoy the blog, and welcome back to Key West.
The parking meters are nuts - 10 minutes for a quarter! They can't even hold a days worth of coins and you can be ticketed for parking at a full meter (which won't take money and therefore is showing "red" expired).
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