Rishi Kapoor wants authority to sell Location Ventures HQ himself

Rishi Kapoor believes he can sell Location Ventures’ headquarters for more money than the offer that is currently on the table.

Last week, the court-appointed receiver managing Coral Gables-based Location Ventures revealed she had negotiated a settlement to sell the company’s office building at 299 Alhambra Circle to Stephen Bittel’s Terranova Corporation via a pending foreclosure case. 

But Bernice Lee, the receiver, is facing opposition from Kapoor, who alleges Terranova is trying to acquire the property at a significant discount, according to recent filings in Miami federal court. The dispute is tied to an ongoing federal lawsuit against Kapoor, Location Ventures and its affiliates filed by the U.S. Securities and Exchange Commission.

Lee and Kapoor’s attorney, Fred Schwartz, each declined comment. Motions filed this week show that Kapoor is willing to put up a fight in the disposition of commercial real estate assets he onced controlled as CEO of Location Ventures. 

In a motion filed on Monday, Kapoor requested that Chief U.S. District Judge Cecilia Altonaga — who is presiding over the SEC civil case — postpone the sale to Terranova for 90 days. A Terranova spokesperson declined to comment. 

“Let Mr. Kapoor, an acknowledged expert on effectively buying and selling properties in South Florida, put out a call for offers and run a public process to attempt to market the property at a fair price,” Kapoor’s motion states. “Perhaps [Terranova] upon learning that they may lose the ability to build a ‘substantial redevelopment opportunity’ will return with a better offer. Or perhaps a different buyer will emerge from a fair public offering.” 

An entity managed by Terranova CFO Scott Fitzgerald, which owns a delinquent loan secured by the 299 Alhambra Circle property, negotiated the proposed settlement with Lee. The five-story building was completed in 1958. 

In October, Terranova acquired the mortgage, records show. The previous lender sued the Location Ventures entity that owns the property last year for allegedly defaulting on the loan, which now stands at $13.8 million, including interest and fees. 

The proposed settlement agreement entails the receiver consenting to a final judgment in the foreclosure case. In exchange, Terranova will pay $100,000 to the Location Ventures entity and will agree to apply roughly $300,000 in rent that is being held in escrow to the mortgage debt, court filings show. 

Last week, Kapoor’s legal team informed Lee that Kapoor would drop any objections if Terranova releases him as a personal guarantor on the delinquent loan. 

Terranova and its partners, Torose Equities and Lndmrk Development, own a 13-story office building at 255 Alhambra Circle, which is adjacent to the Location Ventures headquarters. 

In his motion on Monday, Kapoor alleges that prior to his stepping down as Location Ventures CEO last year he had discussions with Torose Equities principal Scott Sherman to sell the building at 299 Alhambra Circle. At the time, the property was listed for sale for $22 million with CBRE. 

Terranova, Torose and Lndmrk were interested in redeveloping both office buildings into a new mixed-use building of 16 or 17 stories, utilizing Florida’s Live Local Act, the motion states. The planned development would have offices and apartments, Kapoor alleges. 

“Mr. Sherman believed, as did Mr. Kapoor, that the rapidly growing office rental rates in Coconut Grove and Brickell would push up the rental returns in Coral Gables,” the motion states. “When the building was listed with CBRE, a ‘carve out’ was included for Mr. Sherman’s group, who were discussing a sales price in the ‘upper teens’ with Mr. Kapoor.”

Sherman did not respond to a request for comment. 

Terranova, Torose and Lndmrk ended efforts to purchase the building at 299 Alhambra after Kapoor resigned as CEO last summer. At the time, Miami-Dade’s real estate community perceived that Location Ventures was “having a fire sale” of all its properties, the motion states. 

Instead, Terranova purchased the 299 Alhambra property’s delinquent loan “seemingly to obtain the building at a price much lower than that discussed months before,” the motion alleges. The document also claims that the last appraisal of the property, conducted in 2022, was for $18.5 million. 

Since the property was listed, Location Ventures received offers of between $11 million and $14.5 million. The highest bidder was under contract to buy the building, but backed out in January, court filings state. 

In a response on Tuesday, receiver Lee dismissed Kapoor’s recounting of his failed negotiations with Terranova and Torose as moot. While it is “very likely” that Terranova acquired the delinquent mortgage “with the goal of minimizing the amount they would have to pay to acquire the property,” it doesn’t change the fact that the loan is in default and is accruing a default interest rate of nearly $250,000 per month, Lee’s response states. 

“No better offer has been received after nearly nine months of marketing,” Lee’s response states. “Mr. Kapoor is not genuinely interested in preserving equity for the receivership entities’ investors. He is only concerned with mitigating his own personal exposure.” 

Furthermore, Kapoor and his lawyers have not responded to her suggestion that he put $13 million plus the per diem interest and other charges in a trust account while he pursues a better offer, Lee’s response states.