CGI Merchant Hit With Foreclosure Suit Amid Efforts To Sell 55 Miracle Mile
Raoul Thomas is trying to fend off another lender attempting to seize a prized piece of his struggling portfolio.
A special servicer has filed a foreclosure lawsuit against affiliates of CGI Merchant Group after they defaulted on the $25M CMBS loan tied to the 55 Miracle Mile office and retail building in Coral Gables.
LNR Partners said in the complaint filed in Miami-Dade County’s 11th Judicial Circuit Court that Thomas' companies stopped making payments on the loan starting Sept. 6. It filed the suit on behalf of Wilmington Trust, which is trustee to the investors in the CMBS debt.
“We are in constant communication with the lender to reach an amicable solution,” a CGI Merchant representative said in a statement. “We are extremely confident that we will resolve this matter very quickly.”
The company is in negotiations for a potential sale of the four-story office and retail building to a third-party, according to special servicer commentary in the Morningstar Credit database.
“There are multiple groups looking to purchase the asset, and a deal is imminent,” a source familiar with the deal said.
Miami-based CGI Merchant purchased the property at 55 Miracle Mile on Coral Way in 2013 for $26.5M, The Real Deal reported. In 2014, the company secured a $23.4M CMBS loan from Rialto Capital and refinanced it in 2018 with a $25M loan from Starwood Mortgage Capital.
The loan was transferred to special servicer LNR Partners in November, Bisnow first reported, after principal and interest payments on the loan began coming in late in July, which led to it being put on a watchlist with Wells Fargo, the loan’s master servicer.
LNR Partners said in the filing that it used cash management funds to make September, October and November payments on the CMBS loan, but no payments have been made from Dec. 6 through Feb. 5.
“The lender has control of the incoming funds,” A CGI spokesperson told Bisnow in December. “Whatever obligations we have, as far as we know, we are fulfilling.”
The mixed-use building has almost 40K SF of retail space and nearly 26K SF of office space, with tenants including the United States Postal Service, Ben & Jerry’s and All-Inclusive collection. The property's 615-space parking garage is also collateral for the loan. It was 80% occupied as of December, according to servicer commentary, down from 89% at the end of June.
CGI owes a total of $24.2M, plus interest and fees, according to the filing.
A spokesperson for Starwood, which owns LNR Partners, didn't respond to Bisnow’s request for comment.
The 55 Miracle Mile building is far from the only property where CGI has encountered troubles with its debt. It purchased the ground lease for the Trump International Hotel from The Trump Organization for $375M in 2021 before losing it to its lender in a foreclosure auction.
Thomas lost the 132-room Gabriel South Beach hotel in Miami Beach after Deutsche Bank foreclosed on a $71.1M mortgage, and it defaulted on a $48.7M loan for a 15-story office building at 550 Biltmore Way in Coral Gables last year, TRD reported.
