Celebrity real estate investor Grant Cardone is trying to swoop in and buy a luxury apartment complex in Boca Raton out of a bankruptcy process its owner initiated to narrowly avoid foreclosure.
)
A Penn-Florida Cos. affiliate is seeking court approval for a $230M bid from Cardone on the 366-unit 101 Via Mizner. U.S. Bankruptcy Court Judge Peter Russi approved Cardone's bid Thursday after a hearing Wednesday, according to court filings.
Blackstone Mortgage Trust initiated a Uniform Commercial Code foreclosure on the 14-story apartment building at 101 E. Camino Real in December after the ownership entity, Via Mizner Owner I LLC, failed to pay off the $145M mortgage when it matured.
If Cardone follows through with the purchase, it would allow Penn-Florida to satisfy Blackstone's mortgage and return the remaining capital to its investors.
Blackstone declined to comment on Cardone's bid, while Penn-Florida didn't respond to Bisnow’s request for comment.
A UCC foreclosure, which allows a lender to take over a property's ownership rather than the actual real estate, is a faster process than a traditional, court-monitored foreclosure lawsuit.
Just hours before the foreclosure was set to occur, Penn-Florida's affiliate filed for bankruptcy to cancel the auction and give it time to restructure its debt, the attorney representing Penn-Florida, Bradley Shraiberg, told Bisnow in January.
A Penn-Florida spokesperson said at the time that the loan was in good standing at maturity and that the bankruptcy filing was intended to allow time for a refinancing to close while keeping the building operating as usual. A Blackstone spokesperson told Bisnow it was “ surprised and disappointed” by the bankruptcy filing.
Via Mizner Owner I LLC on Monday filed an emergency motion to designate Cardone’s firm, Cardone Real Estate Acquisitions LLC, as a stalking horse bidder with its $230M offer. Within 48 hours of the court's approval, Cardone has agreed to pay a $20M deposit.
An auction of the apartment building is scheduled for June 16, but Shraiberg in the motion asked the court to delay the auction until July 8.
The motion also seeks protections for Cardone, including a $2M termination fee and up to $100K in expense reimbursement if a higher offer comes through.
Cardone would acquire nearly all of the debtor’s assets, including residential and nonresidential leases and on-site equipment, the sales agreement says.
He plans to raise money for the 101 Via Mizner deal from his investors, which will be able to purchase $100M worth of bitcoin with the apartment complex, Cardone told the South Florida Business Journal.
The apartment building, completed in 2016, has one-, two- and three-bedroom apartments as well as a tower suite and penthouse apartments. Monthly rents range between $2,468 and $7,243, according to Apartments.com.
The building is part of a $1B mixed-use development that has faced repeated setbacks.
Penn-Florida has been developing a Mandarin Oriental Hotel & Residences at the project, originally slated for delivery five years ago. The luxury condo-hotel remains unfinished due to construction delays and is now tied up in multiple lawsuits from buyers seeking to recover their deposits.
While the hotel and condo components aren’t part of the bankruptcy case, Cardone told SFBJ he’d be open to helping find a solution.
The entrepreneur and author owns several private companies, but his real estate private equity firm, Cardone Capital, manages a multifamily portfolio valued at about $5B, according to his website.
Cardone didn't respond to Bisnow’s request for comment.
UPDATE, JUNE 5, 4:45 P.M. ET: This story has been updated to reflect that Cardone's stalking horse bid was approved by the court.
)
)
)
)
)
)
)
)
)
)
)
)