A year into Coral Gables’ Columbus Center’s debt woes, Tourmaline Capital Partners paid $76 million for the property facing foreclosure.
Bryn Mawr, Pennsylvania-based Tourmaline bought the office complex consisting of a 14-story building and an eight-story building on a 2.5-acre site at 1 Alhambra Plaza, according to records and real estate database Vizzda. The buyer borrowed $71.6 million for the purchase from Banesco USA.
The 262,000-square-foot complex was sold by receiver Chris Neilson, who was appointed by the court to oversee Columbus Center and its financials in the foreclosure suit pending against its previous owner, San Antonio, Texas-based Affinius Capital.
Affinius started facing issues with its Columbus Center debt in March of last year. At the time, Affinius’ $71.6 million loan on the property entered special servicing due to its failure to renew an interest rate cap for its floating-rate loan, according to Morningstar Credit. That constituted a default under the financing agreement between Affinius and lender Värde Partners.
An interest rate cap is a hedge against rate increases.
In October, Minneapolis-based Värde filed the foreclosure suit against Affinius, alleging it defaulted on a $68.9 million loan. The total amount owed was $77.4 million, including interest and late fees, according to the complaint.
The $76 million sale to Tourmaline doesn’t satisfy the total debt owed, but “represents a reasonable and fair market value,” according to a motion to approve the sale filed by the receiver and Värde in January in the foreclosure case. Tourmaline bought the property free from liens or other financial obligations.
Affinius’ attorney in the foreclosure case, Jamie Zysk Isani, didn’t immediately return a request for comment.
Affinius, led by Len O’Donnell, paid $10.7 million for Columbus Center in 1989, financing the purchase with a $10.6 million loan, according to records. The loan was amended several times in the following decades and assigned to Värde in 2020.
Tourmaline, led by Brandon Huffman, also has an ownership stake in the 34-story Citigroup Center at 201 South Biscayne Boulevard in downtown Miami. In 2023, Tourmaline and New York-based Monarch Alternative Capital paid $250 million for the 28-story office tower at 801 Brickell Avenue in Miami’s Brickell. It marked the biggest South Florida office deal that year.
South Florida’s office landlords have felt the sting from higher interest rates, skyrocketing property insurance and skittish lenders. While the tri-county region became a magnet for out-of-state companies from late 2020 through 2022, demand slowed in recent years. In some cases, even well-leased buildings have struggled due to higher interest rates.
In downtown Fort Lauderdale, lender Trimont filed a foreclosure suit in August against Alliance HP for allegedly defaulting on a $59.2 million loan for the 28-story One Financial Plaza at 100 Southeast Third Avenue. The case is pending, with Neilson serving as the court-appointed receiver for that property as well.
Read more
Commercial
South Florida
Don’t believe the hype: The true story of South Florida’s office space