Qatari Owner, Residents Of St. Regis Reach Deal To Repair Deteriorating Luxury Building

Residents of the St. Regis Bal Harbour condominiums — who sued the Qatari owner of the luxury Miami Beach hotel last year, claiming it had tried to cover up mold colonies, cracking concrete and possible structural damage — have reached a settlement and dismissed the complaint.

The Bal Harbour North South Condominium Association and an affiliate of Al Rayyan Tourism Investment Co., controlled by a member of Qatar's ruling family, reached a deal that includes a testing and remediation plan to be conducted by a third party to address the issues raised in the lawsuit. 

The association dismissed the lawsuit with prejudice in August after striking the deal, meaning it cannot be refiled. The details of the settlement are confidential, according to a joint release issued by the association and ARTIC's local affiliate, Seldar Miami Holding LLC.

“This settlement ensures that our buildings will remain safe, secure, and visually stunning,” condo association President Gregory Sachs said in a statement. “We are excited to partner with Seldar and Marriott and make our community truly best-in-class.”

The association representing 204 condos filed a lawsuit in November in Miami-Dade Circuit Court claiming years of neglect had created unsafe living conditions at the property, which was developed in 2012 at 9703 Collins Ave.

ARTIC bought the 216-key luxury hotel for $213M in 2014, which means it owns and is responsible for the common areas, including the parking garage, in the building, which has two condo towers and a hotel tower. Marriott International owns the St. Regis brand and operates the hotel.

“We are pleased to have reached this resolution and to continue our productive engagement with the Association,” Tarek El Sayed, managing director of Seldar, said in a statement. “We also reaffirm Marriott International’s essential role in operating and maintaining the property in accordance with the St. Regis brand’s renowned high standards upheld across their global portfolio.”

ARTIC is a subsidiary of Al Faisal Holding Co., owned by Sheikh Faisal Bin Qassim Al Thani, a relative of the Qatari royal family.

The original 866-page suit named ARTIC, El Sayed, Seldar and the property manager, Gregory Polino, as defendants. It was filed with dozens of photos as exhibits, including one showing open barrels of liquid labeled “ACID” in the garage, temporary posts appearing to hold up the garage ceiling, cracks in concrete columns and exposed electrical wiring.

The association accused the owners of covering up mold and possible structural damage, like potential punching shear failures — one of the issues believed to contribute to the 2021 Champlain Towers South collapse in Surfside that killed 98 people.

“Without urgent assessment and repair efforts, the consequences may be catastrophic,” the lawsuit read.

While the association's attorneys from Quinn Emanuel referenced the Surfside collapse in the lawsuit, they told Bisnow last year there was no immediate danger of structural failure.

After bringing in a structural engineer for a visual assessment and appealing to the fire department, state health department and brand owner Marriott International to intervene, the association amended the complaint in April, stating conditions were “even worse than feared.”

In May, Seldar filed a response in the court disputing the claims, including that the structure could be at risk of collapse. The defendants said it hired its own engineers, contractors and experts who were in the process of making repairs, claiming there was no need for court-ordered emergency relief.

“Seldar has already undertaken a reasonable, efficient and targeted plan designed to identify and resolve any existing issues affecting the Property, and there is no evidence or expert opinion to the contrary,” its response said.

The following month, the parties issued a joint motion to stay the case for 30 days while they deliberated a solution out of the courthouse, then extended it for another month before reaching a deal in August.

ARTIC refinanced the hotel portion of the St. Regis in 2021 with a $188M CMBS loan from San Francisco-based Column Financial Inc., replacing a $132M loan arranged by the previous owners, the Reuben Brothers, The Real Deal reported at the time.

The floating-rate mortgage was recently placed in special servicing ahead of its maturity next month, according to Morningstar Credit. ARTIC is seeking to exercise the one-year extension option, but loan documents require it to purchase a new interest rate cap, which likely explains the transfer to special servicing, Morningstar Credit Senior Vice President David Putro said.

Property cash flow fell to $16.4M in 2024 from $24.6M in 2021, but there doesn’t appear to be a monetary default. Putro said he expects the loan will be pulled out of the special servicer by its maturity date.

“There’s nothing glaring about this property at the moment other than it's against a maturity option that, up until a month ago, was going to extend,” Putro said.

ARTIC didn't respond to a request for comment on the loan being transferred into special servicing.