R&B Realty narrowly stalled a foreclosure auction for its fairly new mixed-use building in Miami’s Wynwood neighborhood.
On Monday, two R&B entities that own Gateway at Wynwood at 2916 North Miami Avenue, filed for Chapter 11 in U.S. Bankruptcy Court in New York, court records show. The 14-story office and retail building, which R&B completed in 2022, was scheduled for a courthouse sale on Tuesday.
Last month, Miami-Dade Circuit Court Judge Pedro Echarte Jr. granted final judgment in favor of Wilmington Trust NA. It is the trustee for Boise-based A10 Capital, a lender seeking to collect a $112 million mortgage debt from R&B after filing a foreclosure lawsuit in March.
In the bankruptcy filings, the R&B entities listed $1 million to $10 million in assets and $100 million to $500 million in liabilities. Based in New York, R&B is led by CEO Aron Rosenberg. R&B also owns a one-story retail building adjacent to Gateway at Wynwood that is included in the bankruptcy petition.
However, the R&B entities failed to submit a detailed list of creditors, including which ones have secured and unsecured claims, as well as other financial documents required under Chapter 11 regulations, according to a July 1 letter from the bankruptcy court to the R&B entities.
Kevin Nash, bankruptcy attorney for the R&B entities, did not respond to an email or phone message seeking comment.
The bankruptcy filings include a 16-page declaration by David Goldwasser, chief restructuring officer for the R&B entities, that details what led to the foreclosure complaint against Gateway at Wynwood. The mixed-use building’s owner sought bankruptcy protection because the R&B entities were unsuccessful in postponing the foreclosure auction in Miami-Dade Circuit Court, Goldwasser said in his declaration.
The building, which has roughly 195,000 square feet of office space and 25,000 square feet of retail space, is 70 percent leased, the declaration said.
In 2020, while the project was under construction, unnamed thieves used a cyber attack to steal a $3-plus million payment to Gateway at Wynwood’s general contractor, which resulted in the R&B entities losing “valuable liquidity,” the declaration said. As a result, R&B’s investors had to “contribute capital to make up for deficiencies.”
Two years later, construction loans, including $76 million from Miami-based 3650 REIT, expired, “coinciding with the start of dramatic changes in the credit market,” the declaration said.
R&B sought to sell Gateway at Wynwood, but “ran into difficulties, forcing the debtor to seek out short-term financing in an effort to ride out the bad market,” the statement said.
In February of last year, R&B obtained two loans totaling $113 million from A10 and continued to make partial interest payments of roughly $400,000 a month through April, the statement said. Despite R&B’s good faith efforts, A10 sought foreclosure of the property, Goldwasser said.