By Brian Bandell, Senior Reporter, South Florida Business Journal | May 21, 2021
The Variety Hotel in Miami Beach is slated for auction after its owner lost a foreclosure judgment.
BI 44 LLC, an affiliate of Miami-based BridgeInvest, won a $31.8 million foreclosure judgment against AC 1700 Alton Owner LLC. The May 14 ruling, by Miami-Dade County Circuit Court Judge Michael Hanzman, concerns a $25 million mortgage, plus interest and fees.
The 68-room hotel, at 1700 Alton Road, is scheduled for foreclosure auction June 7.
Attorney Victor Petrescu, who represents the borrower in the case, couldn’t be reached for comment.
BridgeInvest Managing Partner Alex Horn said his principal goal it to simply be repaid, even if another bidder pays off the loan and acquires the property during the auction. Otherwise, BridgeInvest is prepared to take title to the property through a credit bid and operate the hotel.
The Variety Hotel was established after the historic building was renovated. Horn said the hotel is open, but parts of the property are not operating because they haven’t received a certificate of occupancy.
AC 1700 Alton Owner acquired the five-story building on a 15,000-square-foot lot for $21 million in 2015. At the time, it was an apartment building that was originally constructed in 1922. AC 1700 Alton Owner started renovating it into the Variety Hotel in 2017, including the addition of a pool.
The BridgeInvest affiliate filed the foreclosure lawsuit against the borrower in June 2020, a few months after the Covid-19 pandemic crippled the tourism industry. Tourism is now on the rebound, but business remains below typical levels. The Variety Hotel opened during the pandemic.
Attorney Isaac Marcushamer, Mark Migdal & Hayden who represents BridgeInvest in the lawsuit, said the biggest issue in the case is what would happen to the contractor liens filed on the property during the construction job. Ultimately, the BridgeInvest mortgage will take priority over those contractor liens, he said.
