The owner of the DoubleTree by Hilton Hotel & Miami Airport Convention Center allegedly hasn’t made mortgage payments since April 2020. So now the lender is looking to collect nearly $33 million in outstanding debt.
The lender, a commercial mortgage-backed securities trust represented by an affiliate of Miami-based Rialto Capital Advisors, filed a foreclosure lawsuit in Miami-Dade Circuit Court against AFP 103 Corp. The entity is managed by executives of New York-based real estate investment firm United Capital Corporation.
The DoubleTree Miami Airport hotel is the latest Miami-Dade County hospitality property to end up in court over financial woes in the wake of tourism disruption caused by the pandemic. Over the summer, two hotels in downtown Miami and Brickell filed for bankruptcy protection to settle with creditors and avoid foreclosure. In March of last year, the DoubleTree Miami Airport hotel furloughed 179 employees, a state WARN record shows.
Attorneys representing United Capital’s affiliate AFP 103 Corp. and the CMBS Trust did not respond to requests for comment.
According to its website, United Capital owns 150 commercial properties encompassing more than eight million square feet across the U.S., including the Marriott Orlando Downtown.
United Capital bought the DoubleTree Miami Airport hotel in 2009 for $11.7 million in a foreclosure auction, records show. The 334-room hotel and 138,198-square-foot conference center at 711 Northwest 72nd Avenue were completed in 1968.
The property is also home to the Miami Merchandise Mart, which is owned by a different entity and is not a party to the Sept. 9 foreclosure lawsuit.
According to the complaint, United Capital’s affiliate took out a refinancing for $40 million in 2013 from an affiliate of UBS Bank. The loan was assigned to the CMBS Trust the same year. In April of last year, the CMBS Trust sent United Capital’s affiliate a notice of default after it missed its monthly mortgage payment, and no payments have been made since then, the lawsuit alleges. As a result, the outstanding principal, plus interest, of $32.8 million is now due, according to the complaint.
During 2020, government restrictions on travel and lodging establishments resulted in a massive decline in hotel guests throughout South Florida. Despite a rebound in tourism, Miami-Dade hotels are still experiencing lower bookings, especially for business travel.
In July, the owner of a Holiday Inn in downtown Miami filed for Chapter 11 bankruptcy protection, listing between $100 million to $500 million in assets, and liabilities between $10 million and $50 million. According to the owner’s attorney, the filing is aimed at settling with creditors and luring investors to redevelop the site at 340 Biscayne Boulevard.
A month later, the owner of the Aloft Brickell Miami at 1001 Southwest Second Avenue also filed for Chapter 11 bankruptcy to head off a foreclosure action by Torchlight Investors, which is seeking to collect on a $17.8 million loan.