|
N MIAMI CONDO NEWS — All About Condo Living in the Magic City — Edited by Heinz Dinter, PhD |
|||||||||||
South Beach Royal Palm misses mortgage payment
South Beach’s Royal Palm hotel missed the weekend deadline for paying off its $109 million mortgage, on the heels of a stalled plan to sell off 160 rooms as condominium units, one of the developers said Monday. The missed payment comes amid cooling enthusiasm for the condo-hotel concept as housing sales drop while room rates in hotels surge. And it adds another business setback for Robert Falor, a prolific condo-hotel developer from Chicago with a growing history of fractured partnerships and troubled projects. Falor said Monday he is heading to New York this week to negotiate an extension with lenders. His majority partner, real estate investor Guy Mitchell, later said the loan has already been extended. Credit Suisse, the lender, did not respond to a request for comment. The Credit Suisse loan, which matured Friday, hinged on revenue from the condo-hotel conversion Falor and partners planned when they paid $128 million for a controlling share of the 417-room Royal Palm from Coral Gables developer R. Donahue Peebles in 2005. Falor said Monday a changing condo-hotel market prompted him to “abort” the conversion 10 months ago in favor of running the Miami Beach’s fourth-largest resort solely as a hotel. Once a favorite source of capital for South Florida’s lodging industry, the condo-hotel model’s stock has fallen with the real estate market. The new buyers of the Mayfair Hotel in Coconut Grove, another Falor project, said last week they wouldn’t continue selling condo-hotel units there. And after selling roughly half of its 49 units, the developer behind the new Angler hotel in South Beach has frozen condo-hotel sales in an effort to sell the entire project outright. “It’s easier to sell the whole hotel than one condo-hotel unit,” said Gregg Covin, the developer who joined with nightclub promoter Michael Capponi to launch the hotel project in 2005. The nearly finished project went on the market last week for $29 million. The Royal Palm is also for sale, and no condos units have been sold, according to a March 6 report from Standard & Poor’s. Falor seemed to face a cash crunch since buying the Royal Palm. His broker, Dianna Cheng, later sued him over a $500,000 loan she claims he and his partners needed to close the deal. And Peebles said Monday he let Falor and partners borrow back $8.5 million of the sales proceeds for 60 days after closing in exchange for giving Peebles a permanent ownership stake in the “mid-teens” range. Peebles said the current Royal Palm problems, first reported by The New York Times, have him perplexed. Falor “has not explained to us how we can find ourselves in this situation while we are in one of the hottest hotel markets in Miami Beach’s history,” he said. Source: www.MiamiHerald.com • Douglas Hanks
|
Top |
miamiMagic.net Directory |
Miami Condo News |
We invite
comments and contributions.
Not yet a subscriber to
Grand Lifestyle published every month?
The miamiMagic.net news journal is an email service designed with you in mind. We think you will enjoy reading it. However, if you wish to unsubscribe, please click here.
You have my 100% guaranty
for protecting your privacy: Copyright
© 2006 Grand Lifestyle Publisher |
|
||||||||||
