Miami Beach hotel facing foreclosure hits market for $37M
BridgeInvest affiliate sued in June for $25M loan
Facing foreclosure from their lender, the owners of the Variety Hotel in Miami Beach listed the property for sale asking $36.5 million.
A company tied to Adam Verner of New York-based Springhouse Partners and Chaim Cahane of Forte Capital Management owns the 68-key hotel at 1700 Alton Road. The property, originally developed in 1923, was recently renovated and converted into a hotel that never opened.
Susan Gale of One Sotheby’s International Realty has the listing for the property, which includes a lobby restaurant and bar, and a courtyard with a swimming pool. The Mediterranean revival-style building, originally known as the Mayflower Hotel, features 4,247 square feet of ground-floor retail that’s partially leased to Regions Bank.
In June, a company tied to BridgeInvest filed a lawsuit against AC 1700 Alton Owner LLC, alleging the developer failed to make payments on a $25 million loan. Attorney Isaac Marcushamer of Mark Migdal & Hayden, who represents the lender, said the developer hasn’t made any payments since April. Jeff Schneider of Levine Kellogg Lehman Schneider and Grossman, who represents the hotel owner, could not be reached for comment. The suit is still pending in Miami-Dade County.
Gale said the owners are motivated to sell and are not looking to operate the hotel, which recently received its certificate of occupancy. “There is a debt that needs to be paid off,” she said.
The developers partnered in 2015 to purchase the property for $21 million.
The building is across the street from a new Trader Joe’s-anchored mixed-use project, developed by Rock Soffer of Turnberry Associates, Elion Partners and members of the Sredni family.
The hotel owners spent three years renovating the property, likely spending close to the asking price on the redevelopment, according to Gale. “The opportunity here is for a buyer that doesn’t want to go through two to three years of renovations,” she said.
A number of buyers are on the hunt for distressed and heavily discounted properties, but many are waiting for prices to drop even further, experts say. The hotel market is not expected to normalize for another two to three years.
“Anyone in hospitality, they know things will get back to normal,” Gale said. “Everyone wants to be in Miami.”