Penn-Florida, the developer behind the long-delayed Mandarin Oriental Residences, Boca Raton is at risk of losing the project after lenders filed a $417.7 million foreclosure lawsuit.
The lending group, which is affiliated with Apollo Global Management, sued an affiliate of the developer last week for allegedly missing interest payments that began in June 2024, failing to repay the loan when it matured in September, missing the project’s February 2025 completion deadline, and allowing the hotel’s management agreement to be terminated, the South Florida Business Journal reported. The lender is Via Mizner Lender 1 LLC, which represents a group that includes Athene Annuity and Life Company and Athora Lux Invest NL-CRE Direct Lending Fund.
The complaint also names contractors that filed construction liens against the project and condo buyers who have units under contract, including several who have already sued the developer.
The lending group says it is owed $417.7 million, including the $270 million principal balance, $24.6 million they advanced to cover project expenses, plus interest, fees and other costs.
The foreclosure would put contractors and condo buyers in a tough spot because the mortgage lender gets paid before construction lienholders and most other creditors. Thirteen buyers have sued Via Mizner Owner III, alleging the developer missed deadlines to complete their units. One buyer won a $1.98 million judgment, while another settled for $2.1 million.
If the foreclosure moves forward, buyers should be able to recover the 10 percent of their deposits still held in escrow. But recovering the remainder of their deposits, which were released to help fund construction, would likely be much more difficult.
The foreclosure targets the 1.49-acre site at 105 East Camino Real, where a planned 163-room hotel and 85-unit luxury condominium has sat partially completed after years of delays.
A Penn-Florida affiliate first unveiled plans for the Mandarin Oriental-branded project in 2015, with an expected construction start in 2017. The developer secured its original construction loan in 2017 and refinanced it with a $270 million loan in August 2023.
The Mandarin Oriental, Boca Raton hotel, owned by a separate Penn-Florida affiliate, is scheduled to be sold at a bankruptcy auction on Aug. 14.
—Eman Elshahawy
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