One of the first South Florida hotels to be on the receiving end of a foreclosure suit during the pandemic was seized by its lender.
An affiliate of BridgeInvest obtained the title to the Variety Hotel in Miami Beach through an auction, more than a year after it filed to foreclose on the 68-key renovated hotel at 1700 Alton Road. The borrower is an entity led by Adam Verner of New York-based Springhouse Partners and Chaim Cahane of Forte Capital Management.
BridgeInvest sued over an unpaid $25 million loan. The borrower ended up owing nearly $32 million, including interest and fees, according to a final judgment dated June 16.
The property was partially a victim of bad timing. Over a period of about three years, Verner and Cahane’s AC 1700 Alton Owner LLC invested millions of dollars into converting the 1923 building into a hotel. It was set to open last year until the pandemic temporarily shut down business and travel. It eventually opened earlier this year.
Attorney Isaac Marcushamer of DGIM Law, who represented the lender, said his client is running the property, and that “all options are on the table” with regards to BridgeInvest’s plans.
Despite investors raising hundreds of millions of dollars to buy distressed hotels during Covid, few properties have faced foreclosure in South Florida, as the region recovered much more quickly than initially expected. Still, there were few non-distressed sales of hotels over the past year.
In August of last year, the owners listed the Variety for sale for $36.5 million. The hotel features a lobby restaurant and bar, a courtyard with a swimming pool, and ground-floor retail space. The Mediterranean revival-style building was formerly known as the Mayflower Hotel.
Cahane of Forte did not immediately respond to a request for comment.
The developers partnered in 2015 to purchase the property for $21 million. It is across the street from a Trader Joe’s-anchored mixed-use project, developed by Rock Soffer of Turnberry Associates, Elion Partners and members of the Sredni family.