(This story, in slightly different form, originally appeared in Incisive Media's Daily Business Review.)

WEST PALM BEACH, FL-The Related Group will lose its local CityPlace South Tower, a major condominium development, through a "friendly foreclosure" by Toronto-based Scotia Capital. A lending consortium led by Scotia Capital filed a foreclosure suit against CityPlace South on Wednesday in Palm Beach Circuit Court.

The giant development company led by Miami real estate mogul Jorge Perez had borrowed $134 million from the consortium to build the condo tower in 2006, according to county records. When the loan came due this month, Related was unable to repay it because it has sold only 39 units in the 420-unit project, according to a company statement released after the foreclosure filing.

The company claims that 367 units were under contract for sale when the building was under construction, but the majority of the buyers walked away from the contracts before closing. Related, like many other South Florida developers, blames the recession and the housing crisis for the failure of the sales. A consortium that includes seven lenders will take title to all unsold units in the building and become the new owners.