Penn-Florida Companies could lose its 101 Via Mizner apartment building in Boca Raton to foreclosure over its alleged failure to pay off a $145 million loan at maturity.
Blackstone Mortgage Trust, through its Parlex 15 Finco lending affiliate, filed a Uniform Commercial Code foreclosure on the 14-story, 366-unit building at 101 East Camino Real. It is seeking to hold an auction on Jan. 15, according to a public notice filed on Sunday.
The property is part of Penn-Florida’s marquee Via Mizner mixed-use development with a Jack Nicklaus-designed golf club and Mandarin Oriental-branded hotel and condo buildings, which are under construction after yearslong delays.
In UCC foreclosures, the auction is of the interest in the limited liability company through which a landlord owns a property. In this case, the auction will be of 100 percent of the interest in Penn-Florida’s Via Mizner Owner I affiliate. UCC foreclosures generally move more quickly than judicial foreclosures, which can linger in court.
Penn-Florida, a Boca Raton-based company led by founder Mark Gensheimer, is working to keep its building, saying it was current on all debt obligations prior to the recent maturity.
The loan “is in process of being repaid in full next month through a refinance,” the firm said in a statement.
The company completed Via Mizner apartments in 2016, first taking out a $75 million loan in 2014 from HSBC, according to records. It refinanced in 2017 with Mack Real Estate Group, bumping up the financing to $180.5 million. In 2021, Blackstone Mortgage Trust refinanced the loan, raising it to $195 million, records show. Blackstone now holds a $145 million portion of the loan, meaning it sold the balance, according a Blackstone Securities and Exchange Commission report filed in October.
The UCC foreclosure is the latest indication that South Florida’s multifamily market is feeling the sting from economic headwinds, marking an end to the boom of 2021 and 2022. At the time, an influx of out-of-state residents supercharged the market with unprecedented demand, prompting record rent increases and a development frenzy. Over the past two years, hefty new supply tempered demand just as the in-migration slowed, leading rents to flatline or even drop in some submarkets.
Some landlords have resorted to offering concessions at their buildings. At 101 Via Mizner, new prospective tenants could get one month rent free under a 15-month lease term and also a reduced $99 administrative fee, down from $500, according to the property’s website.
The building has one- to three-bedroom apartments, with monthly rents ranging from $2,946 to $7,249, 101 Via Mizner’s website shows. It also has studios, though the rents aren’t listed.
Multifamily landlords also have been pummeled by skyrocketing insurance and higher interest rates. Rates, which have stubbornly remained elevated after the Federal Reserve’s two cuts this year, have made refinancing costly for some landlords and led to more demand for equity partners.
In other signs of multifamily debt woes, Lynd was considering in August a $9.1 million capital call from its investors in the 234-unit Parc Place Apartments at 17600 Northwest Fifth Avenue in Miami Gardens. Lynd cited higher insurance premiums and payroll.
Last year, Shidler Group sold the 276-unit Riverland Apartments at 420-432 Southwest 27th Avenue in Fort Lauderdale for $84 million, marking a 22 percent discount from its purchase price in 2022.