Rishi Kapoor is calling it quits.
The embattled developer “amicably stepped down” as CEO of Location Ventures, the Coral Gables-based development firm he founded in 2016, a company spokesperson confirmed to The Real Deal.
“This is part of negotiations to wind down the current partnership of Location Ventures,” the spokesperson said.
Kapoor’s departure, first reported by the Miami Herald, marks an ignominious closing chapter for the one-time rising star in South Florida’s real estate industry. Under Kapoor’s leadership, Location Ventures built a development pipeline of real estate projects worth $300 million, including a slate of proposed co-living projects in Coral Gables, Miami and Miami Beach and a planned luxury condominium in Fort Lauderdale branded under Marriott’s Edition flag.
Yet, Kapoor’s ambitions crumbled amid a cascade of lawsuits filed this year by Location Ventures investors, vendors and a former CFO, Greg Brooks. And Kapoor’s troubles are far from over. Miami-Dade’s ethics commission and state attorney’s office are investigating a private consulting gig Miami Mayor Francis Suarez had with a Location Ventures subsidiary that paid him $10,000 a month. In a lawsuit filed in May, Brooks first revealed the previously undisclosed relationship between Suarez and Location Ventures.
The FBI is also conducting a public corruption probe into the business arrangement, and the Securities and Exchange Commission is investigating other allegations that Kapoor misrepresented potential profits to investors and misappropriated funds for personal expenses, among other possible securities violations.
What happens next
Alan Fine, a retired Miami-Dade judge, is taking over management of Location Ventures, and is overseeing the company’s liquidation, the spokesperson said. The spokesperson could not provide more information, including the status of Location Ventures’ projects currently under construction and those in the planning stages.
Fine did not respond to a request for comment.
It seems unlikely that any of the projects will move forward as constituted. In Miami Beach, city officials recently shut down construction of a co-living project at 1234 and 1260 Washington Avenue. Location Ventures is also under contract to buy a retail building at 1509 Washington Avenue, and a mixed-use apartment building at 1515 Washington Avenue. Kapoor intended to redevelop the two properties into another co-living project.
Miami Beach commissioner Ricky Arriola, who sponsored zoning legislation to allow co-living units along Washington Avenue, told TRD he doesn’t expect those developments to move forward given that Location Ventures is closing shop.
“I think this puts their projects in grave doubt and jeopardy,” Arriola said via text.
Another project in peril is a Coconut Grove co-living and co-working project at 3138 Commodore Plaza in Miami. Plagued by delays, Kapoor sought Mayor Suarez’s assistance in cutting through bureaucratic red tape to obtain permits for Urbin Coconut Grove, the Miami Herald reported. A group of investors also has a pending lawsuit against the project’s development entity that sought to wrest control away from Kapoor.
On Monday, the investors’ attorney Darrin Gursky deposed Brooks, the ex-CFO, about what he knew about Urbin Coconut Grove’s finances. “Brooks testified that it does appear that Urbin Coconut Grove is pretty leveraged right now and there are multiple mortgages on the property,” Gursky said. “Rishi didn’t solicit consent [from the minority partners] to take those mortgages out.”
Brooks also testified that funds from the mortgages were wired to a Location Ventures capital account instead of the bank account servicing the Coconut Grove project, Gursky said.
He just learned about the planned liquidation of Location Ventures’ assets, and he does not yet know how that will impact his clients’ claims, Gursky added.
More turmoil ahead
In recent weeks, many employees have left Location Ventures of their own volition and through significant layoffs, according to a former company executive who asked for anonymity.
“There are not a lot of insiders left,” the source said. “I think Rishi stepped down to save face.”
Kapoor was also facing mounting pressure to relinquish control after two major Location Ventures investors, Diana Ulis and Alex Kleyner, sued him and a company affiliate this month, the source said.
Ulis and Kleyner, a married couple who invest in Miami real estate, are seeking to recoup $25 million they put into Location Ventures and two co-living projects in Coral Gables and Fort Lauderdale. The couple invested $45 million and were able to get paid back part of the funds, $20 million, after reaching an agreement with Kapoor to exit Location Ventures and the projects, the lawsuit states.
Alan Kluger, the attorney for Ulis and Kleyner, did not respond to a request for comment.
“From what I’ve heard, all sides are desirous of avoiding bankruptcy proceedings,” the source said. “I’m speculating [Ulis and Kleyner] forced Rishi out because of their stake in the company.”
The former Location Ventures executive has also spoken to SEC investigators. “My understanding is that they are significantly more interested in everything that happened at Location Ventures,” the source said. “They are spending a lot more time digging into it.”