Midtown Miami development site in foreclosure hits the market
LV Lending is seeking full $15M loan, plus interest
The developer of the planned Triptych project that straddles the border between Midtown Miami and the Design District is listing the site for sale.
HES Group, which is facing foreclosure from its lender, is looking to sell or find a joint venture partner for the 1-acre property at 3601 North Miami Avenue, said Francisco Arocha, CEO and managing partner of HES.
“We’re working in good faith to find a good solution,” Arocha said. “We own the land and we control the land. Our goal is that during the next few weeks, the economy will come back during the election.”
Miguel Pinto of Apex Capital Realty and Daniela Lainville of Yaffe International Realty are co-listing the site.
In early September, LV Midtown LLC filed a foreclosure lawsuit against Aventura Hotel Properties LLC and QR Triptych LLC, alleging that the borrowers failed to pay the real estate taxes for the property in 2018 and 2019 and failed to make payments beginning in February 2019. The lender is seeking the full $15 million loan, plus interest.
LV Midtown provided the loan for the site in July 2018, allowing HES Group to refinance and buy out its former partner, JQ Group of Companies.
Pinto said comparable sales range from $650 per square foot in the Midtown area to $1,000 per square foot in the Miami Design District, which could mean the site could sell for between $29 million and $44.7 million.
Investors are on the hunt for “very well located land” in major markets, Pinto added.
The Triptych project has been in the works since 2014, when the HES affiliate acquired the assemblage for $12.25 million. The property fronts I-195 and is across the street from the Shops at Midtown Miami. It’s zoned T6-12-O, which allows for hotel, multifamily, senior living, retail and office space, according to the offering memorandum.
Triptych was slated to include a nearly 300-room Hilton Curio Collection hotel and about 38,000 square feet of retail space. An earlier version of the 20-story development included 60,000 square feet office space.
The property can be developed into up to 465,743 square feet, including public benefit bonuses, with 154 residential units or 308 lodging units. It can be 12 stories without public benefit, or 20 stories with public benefit, according to the offering.
The pandemic has accelerated foreclosure suits for a growing number of commercial real estate owners.
In June, a company tied to BridgeInvest filed a lawsuit against the owner of the Variety Hotel in Miami Beach, alleging the developer failed to make payments on a $25 million loan. It recently hit the market for $36.5 million.
In August, Bank OZK sued to foreclose on a Lincoln Road property owned by developer David Edelstein, seeking the $12.8 million that’s allegedly remaining on the loan, plus fees and interest.
Arocha said that the current cycle is ending, and a new owner or a joint venture partnership with HES could build the development, and it would be “ready to open in the peak of a new cycle.”
He pointed to a pre-Covid appraisal performed by CBRE that valued the land at $42 million. The appraisal was completed in December.
Pinto, the co-listing broker, said the call for offers is due within about two months.