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September 2, 2010 |
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| March 11, 2010 |
By: Eric Kalis |
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lender associated with Miami Beach-based LNR Partners filed a lawsuit Thursday in the federal court, seeking to foreclose on the owner of the Shore Club, one of South Beach’s most prominent hotels and entertainment destinations.
A commercial mortgage-backed security fund serviced by LNR filed a notice to foreclose on March 3 against Shore Club owner Philips South Beach.
Philips has owned the 309-unit hotel at 1901 Collins Ave. since 1997, according to Miami-Dade County records. It obtained an $81 million loan for the hotel from First National Bank of Chicago in 1999. Over the years, the loan was assigned to various lenders. Most recently, Wells Fargo Bank on Oct. 12, 2009, assigned the loan to the CBMS fund. The fund is JPMCC 2005-CIBC13 Collins Lodging.
The loan’s outstanding balance is in excess of $126 million, said Miami attorney Victor Diaz, who is representing the fund.
Philips South Beach is an affiliate of New York-based Morgans Hotel Group (Nasdaq: MHGC), which owns the Delano South Beach and co-owns the Mondrian South Beach, along with a Hudson Capital subsidiary. Diaz said: “As a matter of policy, the lender does not comment on pending litigation. However, we believe the failure of Philips South Beach to meet certain loan obligations and the resulting lawsuit will not affect the guest experience at the Shore Club.”
Calls to Philips manager Philip Pilevsky were not immediately returned.
Built in 1938 on 2.72 acres, the upscale Shore Club is one of the priciest hotels on South Beach. Nightly room rates range from $325 to $4,500, according to the hotel’s Web site. The famed Japanese restaurant Nobu has an outpost in the hotel.
The Shore Club is a co-defendant in a lawsuit filed by hip-hop mogul Marion “Suge” Knight against rapper Kanye West. During a 2005 party at the hotel hosted by West, Knight was shot in the leg. The case in Miami federal court is pending.
The foreclosure notice comes at a time when the Shore Club and other Miami area hotels are having better luck finding guests than earlier in the recession.
Hotel occupancy in Miami-Dade County increased to 83.3 percent from 75.1 percent during the week ending Feb. 27, compared with the same week in 2009, according to Smith Travel Research.
Average daily room rates in Miami-Dade are showing signs of recovery, rising 0.9 percent from $174.80 in the week ending on Feb. 27, 2009, to $176.40 for the same period this year.
Eric Kalis can be reached at (305) 347-6651.
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