The Real Deal Miami

Another one bites the dust: HFZ cancels Fasano condo project at Shore Club hotel

67-unit project was up to 45% sold

Renderings of the Fasano condo project at the Shore Club with Ziel Feldman (Credit: HFZ Capital, Jhila Farzaneh for The Real Deal)

UPDATED Nov. 3, 10:55 a.m.: HFZ Capital Group is canceling Fasano Residences Miami Beach, a 67-unit luxury condo project planned for the Shore Club hotel property, The Real Deal has learned.

The New York developer began reaching out to buyers on Friday and is in the process of returning deposits, Jay Parker, CEO of Douglas Elliman Florida, told TRD.

Elliman’s Jorge Sanchez, the sales director, confirmed the sales center is closed. Ziel Feldman, founder and managing principal of HFZ, could not immediately be reached and a spokesperson for HFZ did not respond to requests for comment.

Sources said Fasano Residences was between 40 and 45 percent presold, which comes out about 25 to 30 units.

Rumors surrounding the fate of the project included that the Brazilian hospitality company, Fasano, would no longer brand the development. Parker said early last month that HFZ was still connected to the flag, which it brought on in August 2015. Agents also complained that HFZ was difficult to reach, especially in recent months, and would not provide a timeline.

Last month, Parker said that the delayed closure of the hotel was “sparking confusion” but that the developer was communicating with its buyers. “The market for construction financing has been very challenging”, and buyers were getting antsy, he added.

“We urged them to do the right thing and give the buyers the option to terminate their contracts,” Parker said. “Rather than delay, they wanted to reposition the project.”

Fasano Residences joins projects like Auberge Residences & Spa Miami that have been canceled this cycle due to the challenging condo market. The Related Group canceled the Auberge luxury condo project and returned buyers’ deposits earlier this year. Another South Florida project, H3 Hollywood, also has been canceled and will be revived as rentals instead.

HFZ’s Shore Club Property Owner LLC paid $175.3 million for the Shore Club hotel at 1901 Collins Avenue in late 2013, according to property records. The developer planned to close the 309-key hotel by the fall of last year but continued to take hotel reservations into 2018, when it was originally slated to reopen as a Fasano with 85 hotel rooms in addition to the condos. No permits for construction had been filed as of August, according to documents obtained by TRD.

Brazilian architect Isay Weinfeld was hired to design the luxury condo and hotel project, which faced hurdles in its approval process in Miami Beach – including opposition from the nearby Setai Resort and Residences. Ultimately, the developer planned to preserve the property’s central tower, the Shore Club’s original 22-story structure, convert the north tower to an eight-story building and retain most of the south tower’s historic details. Units ranged from 800 square feet to more than 4,000 square feet.

Fasano Residences was slated to be the first U.S. project. Fasano’s portfolio includes 15 restaurants and four hotels and plans for more hotels in Brazil and the U.S.

In the meantime, HFZ will determine whether it re-launches the project as planned or as a new development, Parker said. The hotel, which has been deteriorating in anticipation of the project, will keep operating.