From left: The Fontainebleau Miami Beach, Shore Club and Clevelander South Beach

Jeffrey Soffer’s iconic Fontainebleau Miami Beach was among the first of the city’s hotels to reopen on June 1, after the majority were shut down for the entire month of May.

The sponsors of the 1,500-room oceanfront resort — whose hallways have been graced by Elvis Presley, Lucille Ball, and more recently, Jennifer Lopez and Kim Kardashian West — spent hundreds of thousands of dollars on the reopening.

Jeffrey Soffer, CEO of Fontainebleau Development

Preparations included the purchase of electrostatic sprayers, thermometers and hand sanitizer dispensers throughout the property, as well as training employees in the latest health and safety protocols. And as it prepared to reopen its doors, the luxury hotel planned to hire 500 employees back in the first couple weeks, adding more as occupancy returned.

“We’re cautiously optimistic that people are making reservations,” Philip Goldfarb, president and CEO of the hospitality division of Soffer’s Fontainebleau Development, said at the time.

But of the more than 2,000 employees who were temporarily laid off due to the pandemic, the Fontainebleau ended up bringing back just 774 by July. About 1,300 workers were recently provided with a separation notice, according to a Worker Adjustment and Retraining Notification that cited the effects of ongoing restrictions on travel and large gatherings, as well as the hotel’s low occupancy.

At the same time, a $975 million CMBS loan backing the resort is stuck in special servicing, a situation the hotel’s owners say occured because they are seeking modifications to the loan.

The Fontainebleau is not alone.

“No hotel can operate on less than 20 percent occupancy. The numbers don’t work.”

After Florida began to lift its stay-at-home orders, positive cases of Covid-19 skyrocketed. As of July 13, following a daily record for the U.S. with 15,300 cases reported in 24 hours, there have been more than 282,000 cases and 4,277 deaths documented in the state.

That, coupled with closures of the beaches and countywide curfews, led to already low occupancy rates taking another hit. Many hotels — banking on being sold out for the 4th of July weekend — ended up with significant cancellations.

The start-and-stop of the market spells trouble for South Florida’s hotels, with distressed sales expected to occur later this year. That’s reflective of an even bigger problem for the state’s business activity and real estate markets. Since the pandemic began, close to 3 million people in Florida have reportedly filed for unemployment, with the accommodation and food services industry seeing the highest number of jobless claims.

Suzanne Amaducci-Adams, Bilzin Sumberg

“Until we have a steady stream of income from travelers, the hotels are not going to be able to function properly and not be able to meet their obligations,” said Suzanne Amaducci-Adams, a partner and head of real estate at Bilzin Sumberg, a major commercial law firm based in Miami.

“No hotel can operate on less than 20 percent occupancy,” she added. “The numbers don’t work.”

Survival tactics

Dozens of hotels are in a similar situation as the Fontainebleau and tens of thousands of hospitality workers have lost their jobs in South Florida alone.

The Trump Organization, for example, laid off nearly 800 employees in March, including many at the president’s Mar-a-Lago resort and club in Palm Beach. Alan Lieberman’s South Beach Hotel Group and the Loews Hotel each laid off more than 700 employees.

And with air travel, occupancy and room rates still low, the layoffs will likely last longer than originally anticipated.

Occupancy among South Florida’s hotels that haven’t shut down completely exceeded 30 percent during the week of July 4, according to data from the hotel research firm STR. But while that’s an increase from earlier in the pandemic, it marks a 54 percent annual decline.

The average daily rate was $124, a 24 percent drop from the same week last year, and revenue per available room was $42, down 65 percent year over year, per STR.

A majority of hotels secured loan deferments or concessions that were set to expire by July, and a good chunk of the high season was lost to coronavirus. Like most commercial real estate, any hotel sales that were in the pipeline were either canceled or indefinitely placed on hold.

Before the pandemic, 2020 was supposed to be a banner year for South Florida’s hotels — after the market faced setbacks from the Zika outbreak in 2016 and Hurricane Irma in 2017.

Super Bowl LIV (Getty)

Super Bowl LIV, which Miami hosted in early February, was a boon for local hotels. That weekend, the average daily rate increased almost 150 percent year-over-year, with occupancy rising above 90 percent. Following that, hotels had other events to look forward to: 2020’s Ultra Music Festival in March, the Miami Open in April, and weeks of Spring Break.

“Most hotels were having sort of the best year in five or six years,” said Max Comess, managing director of Hodges Ward Elliott’s Miami office. But all of the big events lined up for the spring were eventually canceled.

Hotel owners and operators typically budget a loss for the slow season, Comess noted, but with the high season cut short, it’s almost impossible to say which hotels will make it through the rest of the year.

“No one knows when the market will really start to bounce back without a vaccine for Covid-19 and a return of consumer confidence in travel,” he added. “Business travel is non-existent, and most Americans are now vacationing in areas they can drive to.”

After being shut down on March 23, Florida’s hotels were allowed to reopen beginning June 1.
But many owners are waiting until August or September to start welcoming guests, while others continue to delay their opening dates due to increased restrictions and low demand.

Among those that are still closed are the Standard Spa Miami Beach, the JW Marriott Marquis Miami, Four Seasons Hotel Miami, the Shore Club, the Gale South Beach, and Novotel Miami Brickell, according to their websites.

The Clevelander South Beach (Getty)

The Clevelander South Beach, a popular party hotel on Ocean Drive, voluntarily closed its doors in July. A notice posted on its website said it was closed until further notice “due to public health concerns” caused by Covid-19.

“Some hotel owners are opting to stay closed,” Amaducci-Adams said. “Hotel owners have never really been faced with that horrible decision before.”

A deal drought

Some big deals that were in the works prior to the pandemic are also on ice.

Richard Branson’s Virgin Hotels — an offshoot of the billionaire entrepreneur’s Virgin Group — had prepared a 46-page offering package for the Shore Club in South Beach, a self-described “Art Deco labyrinth of gardens and alcoves” on Collins Avenue.

Richard Branson

The hotel group had been searching for a flagship property in Miami Beach for years, and seemed to have found it in the 309-room Shore Club owned by Ziel Feldman’s HFZ Capital Group.

Then the pandemic hit.

“Once institutional lenders start saying no, they’re all going to start saying no.”

Virgin was seeking to acquire and redevelop the Shore Club for roughly $335 million. The proposal, obtained by The Real Deal, included a purchase price of $235 million and upgrades that would cost an additional $100 million.

HFZ acquired the hotel in late 2013, with plans to redevelop the historic property into luxury condominiums, but canceled plans three years ago and returned buyers’ deposits due to the slow condo market.

Virgin was aiming to close on the property in the first quarter of 2020, break ground a year later, and open as early as August 2022. But the deal has been tabled indefinitely, as the market overall remains on hold.

Barry Sternlicht, Starwood Capital Group

What happened with the Shore Club is telling for other significant hotel deals in the works prior to the pandemic, in major cities across the country. Some investors, including Barry Sternlicht’s Starwood Capital Group, are on the hunt for deeply discounted hotels.

“We have a pretty deep background in hotels, and I’m willing to buy cheap real estate in the hotel space because I believe in the asset class,” Sternlihct told TRD in a May interview. “I think I know what we can do with them.”

But Miguel Pinto, president and broker of Apex Capital Realty, said for investors who need access to bank financing, even buying distressed hotel assets could be a challenge.

“Banks, for the most part, don’t want to touch hotels today,” he said. “It’s a big risk for them to have hotels in their portfolio — especially at high loan-to-value ratios.

“Without the lending from banks, hotel transactions tend to be very difficult,” he added.

“Completely frozen”

Lenders are unsure of when the market will return and how to value properties.

International and business travel are non-existent, domestic travel is limited, and the cruise line industry, which feeds hotels, is still shut down.

As a result, hotels are “not exactly the most attractive lending asset class right now,” said J.C. de Ona, president of Centennial Bank’s Southeast Florida division. “How do you underwrite a hotel not knowing when they’re going to get profitable right now?”

And the timeline for a recovery is to be determined. The weekend of July 4th was expected to be a “turning point,” Ona said, but once the beaches were closed, hotel owners saw cancellations left and right.

“Are they going to get back to normal? Yes, but it could take a couple of years,” he noted. “At what point do banks get comfortable that the environment is getting better? That’s the unknown.”

Centennial isn’t actively looking to lend on any hotel deals in South Florida, though de Ona said the bank wouldn’t rule it out entirely — depending on the borrower.

Boaz Ashbel, Aztec Group

Boaz Ashbel, managing director of the Miami-based debt brokerage Aztec Group, said the lending market is “completely frozen.”

“Most lenders right now are evaluating every single hotel loan they have, trying to determine what kind of risk they have and how to eliminate it,” he said.

Just a small handful of non-traditional lenders will offer “very high-priced loans” that are designed to be more like bridge and short-term loans “to buy enough time to allow a borrower to get over the pandemic,” Ashbel added.

Most loan agreements include a measuring point to ensure hotels are producing enough income to cover the debt service, said attorney Luis Flores of the law firm Saul Ewing Arnstein & Lehr.

If properties are barely covering their mortgage payments, it could trigger a higher interest rate. Lenders could start to foreclose if the hotel isn’t generating enough money.

“At some point, that breathing room is going to expire and the water is going to boil over,” Flores added. “Once institutional lenders start saying no, they’re all going to start saying no. It will be like a brush fire, it will start to spread very quickly.”

Desperate times

Borrowers with securitized commercial mortgages will likely be the first to default, according to several industry sources.

CMBS loans are typically hardest to renegotiate and hotels dependent on large groups and conventions could take the largest time to recover, Ashbel said.

That could be especially true for Soffer’s Fontainebleau, the largest hotel in Miami-Dade, known for hosting conventions and star-studded concerts.

Typically, about 50 percent of the Fontainebleau’s business comes from group bookings and conventions; leisure travelers take up the other half.

And the hotel’s nearly $1 billion CMBS loan is the largest to go into special servicing in South Florida. Though special servicing is usually triggered by two missed payments, the hotel is on up to speed on its debt service, according to Trepp.

“We’re still working through [loan] modifications,” Brett Mufson, president of Fontainebleau Development, told TRD in July. “We remain in compliance and are not in default.”

The Fontainebleau Miami Beach

There’s a big gap between Fontainebleau’s loan and the next CMBS loan on a South Florida hotel to go into special servicing: the nearly $114 million mortgage backing the Grand Beach Hotel.

The top five CMBS hotel loans in special servicing, per Trepp, are for a variety of properties throughout Miami-Dade, Broward and Palm Beach counties, and no hotel owner is immune, industry sources say.

Real estate investment banking firm Lotus Capital Partners, led by founder and CEO Faisal Ashraf, is working on behalf of lenders on debt restructurings with several hotel owners. That includes reallocating furniture, fixtures, and equipment reserves to make their debt payments and arranging forbearance agreements, Ashraf said.

“Large hotels will be very slow to come out of the gate or be fundamentally changed forever,” Ashraf said. “I think the second round of forbearances is when the claws come out and it could coincide with the lifting of all of these moratoriums.”

Once lender concessions run out, many hotel owners will be forced to spend more of their own capital, sell their debt, or sell their properties.

Most owners aren’t yet desperate, but some “will be forced to make decisions based on their liquidity situation,” said Scott Berman, a principal at PricewaterhouseCoopers, who leads the hospitality and leisure practice for the firm.

“Cash is king and liquidity is essential,” Berman added.

Publicly, many owners have been holding firm, expressing confidence that the market will bounce back in a matter of time. But, behind closed doors, some are also sizing up their options should that take longer than they hope.

“We have knowledge of many hotels [where] the owners want out,” said Pinto of Apex Capital. “You won’t see them hit the market for now, but we are getting calls from the owners to bring them offers. They want out.”

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The U.S. home loan delinquency rate in April 2020 spiked 70 percent above its level a year ago, according to a recent report from real estate data company CoreLogic. (iStock)

The U.S. home loan delinquency rate in April was 70 percent higher than a year ago, according to a recent report from real estate data company CoreLogic.

This growth was driven by early-stage delinquencies — loans with payments 30 to 59 days overdue. April’s early-stage delinquency rate of 4.2 percent was more than double the rate in April 2019. However, serious delinquencies, with payments at least 90 days past due, fell to 1.2 percent of loans, their lowest level since June 2000.

Although delinquencies have risen in each of the 10 largest metro areas, home loans in some places have performed better than in others. As a general rule, metros where governments enacted work and travel restrictions in March to curb the coronavirus outbreak clocked higher April delinquency rates than places that enacted restrictions later.

Miami

The major metro area with the highest delinquency rate was Miami, where the county’s mayor ordered all nonessential businesses to close in March but where coronavirus cases have recently skyrocketed. Miami’s home loan delinquency rate was the highest among the top 10 metro areas by population in April 2020, reaching 11.5 percent. That was a 6.7 percentage-point increase and a 140 percent increase from a year ago.

New York City

Next on the list is New York City, where the April delinquency rate climbed to 10.4 percent, more than double its level at the same time last year.

New York City was hit early and hard by the coronavirus outbreak and became its global epicenter in mid March, accounting for 5 percent of all cases globally. New York Gov. Andrew Cuomo and New York City Mayor Bill de Blasio at that point took aggressive steps to curb the virus’s spread by enacting restrictions on travel, dining, and all nonessential work.

Within weeks of the first confirmed coronavirus cases in the United States, thousands of New Yorkers lost their jobs as hotels, retailers and construction firms laid off or furloughed staff. Strapped for cash, New York borrowers were three times more likely to request forbearance on their home loans than the typical borrower, according to one analysis of 22,000 mortgages across the United States.

Las Vegas

The lion’s share of the Vegas workforce is in the leisure and hospitality industry, so hotel closures have sent unemployment claims skyward and decimated many residents’ budgets. The outlook in the coming months doesn’t look much better, with job losses related to coronavirus estimated to double those of the 2007-2009 recession. This has translated into poorer loan performance: In April 2020, the Las Vegas home loan delinquency rate increased to 8.5 percent, up from 3.2 percent a year earlier.

Houston

The delinquency rate in the self-proclaimed “energy capital” of the United States jumped to 8.2 percent in April 2020 from 4.5 percent a year before. Houston is suffering two overlapping global crises: the pandemic and cratering oil prices caused by a price war between Saudi Arabia and the Russian Federation. Major petroleum companies headquartered in Houston have laid off thousands of employees, and some 200,000 to 300,000 workers may lose their jobs, according to some estimates.

Chicago

The Chicago metro area’s delinquency rate in April 2020 was 6.6 percent, up from 4 percent a year ago. Compared to other cities, that might seem relatively modest, but clouds have been gathering over the Chicago residential market for some time: Cook County, which encloses Chicago, ranked among the 50 most vulnerable counties in the United States by foreclosure risk, according to a recent report from ATTOM Data Solutions.

The post TRD Insights: Home loan delinquencies soar in cities appeared first on The Real Deal Miami.

Alex Sapir and Rotem Rosen (Getty, iStock)

A real estate family that worked with the Trump Organization in the mid aughts has filed a lawsuit against a former business partner, seeking at least $100 million in damages.

Alex Sapir, who is president and CEO of the Sapir Organization, alleges that Rotem Rosen worked to “siphon tens of millions of dollars, misappropriate proprietary information, and violate the contractual terms of his ouster from the Sapir family and its business,” Sapir’s lawyer told Bloomberg.

The lawsuit also alleges that while Rosen negotiated his exit from the company in 2017, Omer Rosen, his brother and the Sapir Organization’s general counsel, stole some 1,500 sensitive company documents.

A lawyer for Rosen at Kasowitz Benson Torres said, “the complaint is frivolous and is filled with blatant lies as will be shown in due course.”

Drama has swirled in the family since at least 2017 when Zina Sapir, sister to Alex and daughter of company founder and Soviet emigre Tamir Sapir, filed for divorce against Rosen.

It was the same year Alex tried, and failed, to take the company private — a task he recently succeeded at.

Zina and Rotem were married in 2007 at Trump’s Mar-a-Lago resort in Palm Beach, Florida, while Trump Soho — a collaborative project between the families — was under construction.

Tamir Sapir died in 2014, and Trump Soho was renamed the Dominick in 2017 after years of financial struggle.

Following the divorce, Rosen filed a $103 million lawsuit against Tamir Sapir’s estate, claiming he was owed compensation for deals prior to his exit from the company. [Bloomberg] — Orion Jones

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101 Palmetto Lane (Credit: Google Maps)

The president of a supplement company sold a West Palm Beach home overlooking the Intracoastal Waterway for $6 million, marking one of the city’s most expensive single-family home sales of the past year.

Brian Ray, president of West Palm Beach-based Garden of Life, and his wife, Kristen, sold the 5,668-square-foot house at 101 Palmetto Lane for $1,058 per square foot, records show. The trust of Alaina Alexander Ewing bought the home.

Sabra Kirkpatrick of Brown Harris Stevens represented the seller, and John Stewart of Brown Harris Stevens represented the buyer.

The home was designed by Roy & Posey Architects and built by Island Construction. It features five bedrooms and five bathrooms. It also features a guest house, pool, spa, dock and boat lift.

The house was built in 2013, records show. The property last sold in 2010 for $1.2 million.

West Palm’s luxury home prices fall far below those just across the bridge in Palm Beach . The city has seen more high-end development in recent years, however. Flagler Investors, led by Al Adelson and Gene Golub, developed The Bristol, a 25-story, 69-unit luxury tower at 1100 South Flagler Drive in West Palm, where buyers include beauty mogul Sydell Miller, who closed on a full-floor penthouse for $42.6 million

In June, interior designer and developer Hilary Musser paid $5 million for a waterfront property in West Palm Beach at 3208 Washington Road.

The post Garden of Life exec sells waterfront West Palm Beach home for $6M appeared first on The Real Deal Miami.

150 North Federal Highway and Jaime Sturgis

A development site sandwiched between Fort Lauderdale’s Flagler Village and the New River hit the market for $12.5 million.

The property at 150 North Federal Highway includes a two-story 9,653-square-foot office building that was built in 1985.

The site, near Virgin Trains USA’s Fort Lauderdale station, is listed with Native Realty founder and CEO Jaime Sturgis. It could be developed into a hotel with up to 212 rooms, a residential project with 109 units, or a 12-story, mixed-use development, according to a press release.

Property records show 150 North Federal LLC, managed by attorneys Connis O. Brown III and Seth P. Robert of Brown Robert LLP, owns the 0.78-acre site. It last sold for $1.3 million in 2004.

Sturgis said the site is one of the last undeveloped properties at the gateway to downtown Fort Lauderdale. Earlier this year, he listed a Flagler Village assemblage on Northeast Third Avenue and Northeast Sixth Street for $8 million.

In June, billionaire Vlad Doronin’s company OKO Group assembled and closed on three blocks of land totaling 6.7 acres for nearly $63 million, just south of the New River and Las Olas Boulevard.

Last fall, Kushner Companies purchased a 4.2-acre assemblage across the street from the Virgin Trains station for $49 million, where Kushner is planning a mixed-use project.

Even during the pandemic, an office tower in downtown Fort Lauderdale sold for $82.5 million, marking one of the largest commercial real estate deals in South Florida since March.

The post Downtown Fort Lauderdale dev site hits market for $12.5M appeared first on The Real Deal Miami.

The coronavirus has been crushing global real estate investment for months, but there are a couple of sectors weathering the storm (iStock)

Global real estate investment was slammed over the first six months of the year, falling by a third compared to the same period last year.

But amid the coronavirus-fueled hurricane a couple of sectors have been holding up, according to a new report from Savills, cited in Bloomberg.

First the bad news: The Asia-Pacific region, where the virus first flared, saw real estate investment fall 45 percent from January through June, according to the report. In the Americas, investment dropped by 36 percent and in the Middle East, Europe and Africa, the overall decline was 19 percent.

Simon Hope, head of global capital markets at Savills, said investment is “expected to remain well below pre-pandemic levels for the rest of 2020 as investors wait for market clarity.” Overall, the International Monetary Fund predicts a decline in global GDP of 4.9 percent this year. Through the end of 2021, the IMF estimates a loss of $12.5 trillion globally.

Still, as bad as things have been, declines have been less severe than the January through June period in 2008, when global real estate investment fell by 49 percent, according to Savills. That number kept falling through the middle of 2009.

And despite the grim outlook, “certain sectors are expected to outperform as investors focus on secure assets, namely logistics, residential and life sciences,” Hope told Bloomberg.

Industrial and residential properties have fared better than hotels and retail, where investment declined 59 and 41 percent, respectively, since government lockdowns halted the global travel industry and forced stores to close down.

In late February, the Blackstone Group agreed to buy a $3 billion portfolio of Japanese rental properties from Anbang Insurance, boosting the market there, according to Savills.

While Congress gears up to debate another massive stimulus bill — potentially including low-cost loans for real estate companies — the European Union remains divided over its latest spending plan, and British Prime Minister Boris Johnson has promised new infrastructure spending, potentially creating more opportunities for real estate investors. [Bloomberg] — Orion Jones

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Miami condo sales remained steady as South Florida continues to be the new epicenter of Covid-19.

A total of 100 condos sold for $41.5 million in Miami-Dade County last week. That’s compared to 95 units that sold for $37 million the previous week. Condos last week sold for an average price of about $415,000 or $332 per square foot.

At the top was the $5.2 million sale of Oceana Bal Harbour unit 1402S. The south tower condo sold for nearly $1,500 per square foot after 594 days on the market. Nivia Fernandez represented the buyer and seller.

The second most expensive sale of the week was at Setai Resort and Residences in Miami Beach. Unit 3703 traded for $4 million, or $2,519 per square foot. It was listed for 276 days. Lourdes Gutierrez was the listing agent, and the buyer’s agent was Ryan Mendell.

Here’s a breakdown of the top 10 sales from July 12 to July 18. Click on the map for more information:

Most expensive
Oceana Bal Harbour #1402S | 594 days on market | $5.2M | $1,448 psf | Listing agent: Nivia Fernandez | Buyer’s agent: Nivia Fernandez

Least expensive
Brickell Townhouse Condo #8D | 88 days on market | $680K | $399 psf | Listing agent: Cristina Lopez | Buyer’s agent: Mariana Garber

Most days on market
Oceana Bal Harbour #1402S | 594 days on market | $5.2M | $1,448 psf | Listing agent: Nivia Fernandez | Buyer’s agent: Nivia Fernandez

Fewest days on market
Coconut Grove Bayshore #11A | 11 days on market | $1.3M | $715 psf | Listing agent: Christine Stiphany | Buyer’s agent: Jane Barrellier

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Jack Niklaus and a rendering of the Panther National Clubhouse (Getty)

Famed golfer Jack Nicklaus will design a golf course within the master-planned community of Avenir in Palm Beach Gardens.

Nicklaus’s company, Nicklaus Design, is partnering with Centaur US Holdings to design a 210-acre Jack Nicklaus Signature Golf Course to be called “Panther National.” In addition to an 18-hole championship course, the property will include a nine-hole Par-3 short course and a state-of-the-art training and practice facility, according to a release.

The private golf enclave will also include 459 luxury single-family homes. Residents will have access to the club’s dining, spa, fitness center and pool, along with a “beach club” on a planned 10-acre Crystal Lagoon with white-sand beaches, according to the release.

Nicklaus, who won more major championships than any other golfer in history, said on Sunday during the Memorial Tournament in Dublin, Ohio, that he and wife, Barbara, contracted Covid-19 in March. Speaking to CBS’ Jim Nantz, Nicklaus said he had a sore throat and cough while his wife was asymptomatic. Nicklaus said he and his wife recovered from the virus in late April.

Avenir is a massive master-planned community just north of Northlake Boulevard and west of the Florida Turnpike. The community will total 4,752 acres and will include 3,900 homes. The community will feature a working farm and more than 2,400 acres of conservation and preserve areas.

The community is approved for 400,000 square feet of retail space, 200,000 square feet for medical uses, more than 1 million square-feet of professional offices and a hotel.

National homebuilders such as Kenco, K. Hovnanian and Toll Brothers are building homes at Avenir. The companies are currently constructing their model homes or are about to start building them, but no homes have yet been completed, Danny Lopez of Avenir Holdings told The Real Deal.

The post Jack Nicklaus to design golf course at Avenir in Palm Beach Gardens appeared first on The Real Deal Miami.

Bon Jovi and 1075 North Ocean Boulevard (Getty, Realtor)

Rock star Jon Bon Jovi closed on an oceanfront mansion in Palm Beach for $43 million, after selling his home down the street for less than half of that.

The “Livin’ On A Prayer” artist acquired the seven-bedroom, 10,232-square-foot mansion at 1075 North Ocean Boulevard on the same day he sold the oceanfront home at 230 North Ocean Boulevard for $19.8 million, records show. Bon Jovi used the same LLC that sold the smaller home to purchase the larger one.

Christian Angle of Christian Angle Real Estate represented Bon Jovi in both deals, as well as the seller of 1075 North Ocean Boulevard, according to Realtor.com.

The seller of the larger estate is Jeffrey A. Marcus, a cable television mogul. Marcus sold his company to Microsoft co-founder Paul Allen in 1998 and then became president and CEO of the second largest radio company in the U.S., according to his bio. He later joined a private equity firm called Crestview Partners.

Marcus paid $23.2 million for the Palm Beach home in 2014, according to property records. The mansion, built in 2007, features a courtyard pool and cabana, exercise room, wine cellar, elevators, a three-car air conditioned garage, and two oceanfront loggias, according to the listing. It sits on a 0.66-acre lot.

On Friday, Bon Jovi and his wife Dorothea Hurley sold the new 5,024-square-foot home at 230 Ocean Boulevard. The New Jersey native and lead singer of the rock band Bon Jovi had paid $10 million for that property in 2018, knocked down the previous house, and built a new one. The Shapiro Pertnoy Construction Group built the house.

Bon Jovi’s two high-priced deals add to what has been a very active luxury home sales market in Palm Beach in the past few months. The barrier island town experienced a jump in sales as a result of the coronavirus pandemic, with two properties fetching $70 million and up.

The post Bon Jovi pays $43M for oceanfront Palm Beach estate appeared first on The Real Deal Miami.

Victorino Noval and the mountain (Credit: Michael Tullberg/Getty Images)

As if the drama behind the Mountain of Beverly Hills couldn’t get any more convoluted, here come the Feds.

The U.S. Department of Justice filed a lawsuit on Friday to seize the property, alleging it was purchased with part of $105 million embezzled from the Kuwaiti government by three high-ranking officials in Kuwait’s Ministry of Defense.

The DOJ alleges the money was stolen between 2009 and 2016. Those officials allegedly transferred the money out of the National Bank of Kuwait and ultimately got it over to Victorino Noval, who used it to buy or improve the Mountain.

The “pilfered funds” also bought three homes in Beverly Hills, an apartment in Westwood, a private jet, yacht, Lamborghini car, and around $40,000 worth of memorabilia of boxer Manny Pacquiao, according to the DOJ.

Noval bought the Mountain with Atlanta developer Charles “Chip” Dickens in 2004, but nothing ever came of the investment. The property ended up racking up debt and hit the market in 2018 with a record asking price of $1 billion. The $200 million in debt on the property kept investors away and it ultimately sold back to the lender, a trust for the late Herbalife founder Mark Hughes, for just $100,000 last August.

The federal suit does not name the Kuwaiti officials. However, former Kuwaiti Defense Minister Khaled Al-Sabah previously said he invested in the Mountain property with Noval using his personal fortune, but no government funds. Al-Sabah is a member of the Kuwaiti royal family.

Al-Sabah sued Noval in October for $488 million, claiming that Noval duped him into thinking he would get a 50 percent cut of his investment into the Mountain, but instead used that money to finance a “lavish and extravagant lifestyle.”

In response to the DOJ lawsuit, a lawyer for Al-Sabah said that “any suggestion that my client was involved in any illegal activity is incorrect,” according to the Associated Press.

Meanwhile, an attorney for Noval claims that he vetted the foreign national who transferred the funds to him as a member of the Kuwaiti royal family.

“Any improprieties relating to funds wired to the United States would be something that my client would have no way of knowing about nor was it shared with him,” Ronald Richards said. “My client has no need nor interest in retaining any improperly distributed funds.”

The Mountain is currently on the market for an undisclosed sum with New York-based Cushman & Wakefield investment-sales broker Doug Harmon. Some of Los Angeles’ most prominent residential brokers have tried to sell the property without luck over the year.

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108 Leonard Street with Nicole Kidman and Keith Urban (Google Maps, Getty)

Nicole Kidman and Keith Urban have added a Manhattan condo to their international real estate collection.

The actress and country singer paid $3.5 million for a two-bedroom at 108 Leonard Street, Tribeca’s famous clock tower building, the New York Post reported.

Units currently for sale in the building — which previously headquartered the New York Life Insurance Company before undergoing a condo conversion in 2018 — range from $1.6 million to $12.5 million, according to StreetEasy.

Don Peebles and Elad’s Isaac Tshuva paid $160 million to buy the 400,000-square-foot property from the Bloomberg administration in 2013.

The project hit a setback when a state judge in 2016 ruled the developers couldn’t electrify the clock at the top of the building, which complicated efforts to convert the upper portion into a condo. El Ad Group and the Peebles Organization appealed, and the state’s highest court reversed the decision, clearing the way for the conversion.

Among the additions made to the building during its conversion, a private vehicle entrance descends to an underground reception area with barrel-vaulted ceilings.

Privacy features reportedly drew Kidman to the building, as well as to her former New York City residence at 200 11th Avenue. The couple’s main residence is a Nashville mansion, but they also own homes in Los Angeles and Australia.

McKim Mead & White, New York’s early 20th-century “starchitects,” designed the Leonard Street building in the Italian Renaissance style. It was completed in 1894. [NYP] — Orion Jones

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60 Riverside Boulevard and (inset) the island of Nauru (Google Maps)

An Upper West Side condo is entangled in an international money laundering investigation.

Following an Australian court, a U.S. District Court is blocking any future sale of the 2,207-square-foot unit at The Aldyn at 60 Riverside Boulevard, because the property’s owners are the target of a criminal investigation stemming from allegations of bribery and money laundering.

Amit Gupta and Sushila Gupta, who property records show purchased the condo for $3.8 million in 2011 from an LLC linked to Extell Development, are being investigated for their role in bribing government officials of the island nation Nauru in exchange for access to its raw materials.

The current value of the condo is $3.67 million, below its original purchase price, according to the court order. No charges in connection with the criminal investigation have been filed.

Extell, which developed The Aldyn, did not return requests for comment. The Guptas could not be reached.

The condo is the only U.S. property controlled by the Gupta family, according to the court order. The remaining 18 properties are located in Australia and Singapore.

Of the 19 properties listed, 17 are believed to be controlled by Ashok Gupta, who was named alongside Amit Gupta in media reports for bribing a foreign government official following a 2018 decision by a court in Singapore.

Ashok and Amit Gupta were reportedly directors of a chemical extraction company, Getax, at the time of the bribery in 2010, and sought access to phosphate deposits in Nauru, the world’s smallest republic. Getax’s logistics arm was found by the Singaporean court to have participated in bribery, and was fined.

Australian media, too, found prior evidence of payments made to Nauru officials in exchange for preferential access to the country’s raw materials. But watchdog organizations have expressed concern about the slow pace of the Australian government’s investigation.

“There is a perception that perhaps the government doesn’t want this sort of investigation to come to anything much,” said former Australian supreme court judge Anthony Whealy, who served as the chairman of Transparency International Australia in 2016.

Australia’s government has been said to rely on Nauru, which it pays to run a controversial refugee camp that keeps would-be asylum seekers from crossing its borders. Critics had questioned whether the Australian government was dragging out the investigation because of concerns that it would hurt relations with the island nation. Voters in Nauru removed from office the government at the center of bribery suspicions in 2016.

Contact Orion Jones at orion.jones@therealdeal.com

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MeetElise CEO Minna Song (Linkedin)

It’s rare that apartment seekers limit their searches to business hours.

But a New York startup, backed by two of the country’s biggest landlords, has built an AI-powered leasing assistant available to field queries 24/7.

MeetElise said Tuesday that it closed a $6.5 million Series A funding round led by Navitas Capital, with participation from AvalonBay Communities and Equity Residential, which have deployed the company’s digital assistant “Elise” throughout their portfolios.

Founded in 2017 by Tony Stoyanov and Minna Song, MeetElise uses machine learning to streamline the leasing process and claims its digital assistant “Elise” can convert 65 percent more leads than traditional leasing agents.

As machine learning proliferates the real estate industry, the relationship with AvalonBay and Equity (which also invested in MeetElise’s $1.9 million seed round last year) has played a key role: The real estate investment trusts, with some 180,000 apartment units combined, shared tens of thousands of anonymized conversations with apartment seekers to help “Elise” learn to respond to their queries using natural-sounding language.

It worked and then some, according to a selection of feedback shared with The Real Deal, in which tenants commented, “You’re a hard worker — I like your moxy [sic],” and “Do you ever sleep? You are like a super hero!”

Song said the idea for MeetElise grew out of her and Stoyanov’s desire to address inefficiencies in the housing market. They officially closed on the Series A in April, despite the shutdown sparked by the coronavirus.

In fact, Song said MeetElise saw a “surge” of inbound leads during the shutdown, with a 44 percent spike in business between March and mid-July as landlords turned to automation to keep their businesses running while employees complied with stay-home orders.

MeetElise currently has 20 employees, and plans to double the size of the team in the next 12 months. Elise is currently being used in 240,000 apartments across the U.S.

For Navitas, it’s the first deal led by Louis Schotsky, who joined the venture firm last year from Equity, where he worked in operations and investment. (He also met Song during that time.) “We all said, this could be huge so let’s give them some money… and [time] to develop the product,” he said.

Schotsky said MeetElise’s ability to automate the most redundant parts of leasing can save time and money — not just for big landlords. “The product, on a per unit basis, creates more value for smaller operations who have nobody on site,” he said.

For that reason, Song said the Series A will be used to beef up MeetElise’s national sales team and target additional clients, specifically the mom-and-pop operations that stand to benefit from a more streamlined process. “The really large owners represent less than 5 percent of the market,” she said. “Ninety-five percent of the market is the space we can break into.”

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Joe Biden (Getty)

Democratic presidential nominee Joe Biden has unveiled another piece of his economic plan — and it will be financed by taxes on real estate investors with incomes of $400,000 and above.

The $775 billion “caring economy” plan, which seeks to support care for children and the elderly, would target tax breaks for “like-kind” 1031 exchanges, a senior campaign official told Bloomberg. The plan would also prevent investors from deducting real estate losses from their taxable income.

Jonathan Gray, Blackstone President and COO

Biden first teased the plan Monday at a fundraiser hosted by Blackstone Group’s Jonathan Gray. “I hope I don’t offend any of you by that but I really think it is totally consistent with a market economy and moving forward,” he told donors at the event. The candidate is set to deliver a speech on the plan Tuesday afternoon in Delaware.

The proposed plan calls for universal preschool for three- and four-year-olds, the elimination of the waiting list for Medicaid home and community services, and a child care tax credit of up to $8,000 for low-income and middle-class families.

It would add 3 million jobs in the care and education sectors, including 150,000 community health workers for underserved communities.

The “caring economy” plan constitutes the third plank of Biden’s economic plan, which also includes a $2 trillion investment in clean energy and measures to boost manufacturing and innovation in the U.S. [Bloomberg] — Kevin Sun

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Stuart Elliott

An agent at a real estate brokerage in Brooklyn said he routinely witnesses unequal treatment from landlords when he submits applications from Black renters. To deal with it, he said agents at his firm lighten photos of Black applicants to give those clients a better chance.

Welcome to the state of race relations in 2020.

As we write in one of our cover stories in this issue, the protest movement that swept the globe in the wake of George Floyd’s death has put corporate America under a microscope.

As a result, many in real estate are deciding to address what is now widely acknowledged as structural racism — inequality that has come about either intentionally or as a result of unconscious biases and needs to be fixed.

Black staffers at real estate brokerages are now also making themselves heard to confront what they see as unequal treatment. Incidents at Nooklyn and Core in New York have prompted anger over allegedly racially insensitive actions by executives. Those staffers are also pointing out bigger systemic problems in the brokerage world, like firms failing to call out and continuing to work with discriminatory landlords.

Meanwhile, in our Closing interview, Congressman Hakeem Jeffries — chair of the House Democratic caucus and a rising star in the party — speaks movingly about the racism he has experienced throughout his life and that he is now educating his teenage sons to navigate. 

“I’ve been stopped by the police in high school and in college. I have been stopped by the police as a law student and as a lawyer,” Jeffries told us. “I have been stopped by the police as a state legislator and as a member of Congress.”

He sees a need for “a total reset” on race relations, including change when it comes to real estate issues like gentrification.

More broadly, you’d have to look back to the 1960s — now more than half a century ago — to find a comparable period of sweeping social change.

Think about what took up our attention during recent boom times: condo buildings with pet spas as amenities and news about the latest hipster artisanal pickle store opening a storefront in Williamsburg. It seems trivial now.

Real estate can make a difference with many of the central issues of our time, not only racism. And that all comes as the pandemic sets new records in more than 20 states, including some of the country’s top real estate markets. Among the problems the industry must address:

• How to make its buildings safe to prevent the transmission of coronavirus since we can’t all socialize outside, work from home or order from Amazon forever.

• The greening of our cities and how to prevent buildings from contributing to climate change (through emissions). Skyscrapers with hanging gardens and bike lanes were just the start pre-coronavirus. And developers still need to outfit many of their properties to weather the climate change that’s already happening, clearly evident in places like Miami Beach.

• How to remake and improve the country’s ailing infrastructure. Real estate firms would play a big part in any federal infrastructure plan under a Biden presidency, for example, helping to put some of the country’s 18 million unemployed to work. (Under a Trump presidency, there might be another “infrastructure week.”)

• Whether housing is a basic human right. The leftward march of politics in big U.S. cities, including New York, Los Angeles and Chicago, and landmark rent reform, rent strikes and eviction moratoriums would suggest things could be heading further in that direction.

It’s a lot to tackle. But it is an opportunity. We are living in pretty momentous times. And ignoring problems that already plague our society is no longer an option.

Elsewhere in the issue we have stories on what real estate companies received PPP loans; “re-closings” amid the rise in Covid nationally; how restaurants are dealing with their landlords; and the surprising amount of investment in nursing homes.

Enjoy the issue.

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Ta-boo and Denny’s Children Wear (Credit: Google Maps)

Retailers and restaurants are losing money hand over fist during the pandemic, but insurance companies are still refusing to pay business interruption insurance claims, according to a series of recently filed lawsuits.

Last week, children’s clothing retailer Denny’s and the popular Palm Beach bar & restaurant Ta-boo filed suit against their insurers, International Catastrophe Insurance Managers and Lloyd’s of London, respectively, for denying their claims. Both suits were filed in federal court in the Southern District of Florida.

Such lawsuits are becoming increasingly common in Florida as Covid-19 cases skyrocket and counties eye tighter restrictions on businesses and restaurants.

“The economic realities are setting in,” said Steve Marks, an attorney with Podhurst Orseck, who represents the plaintiffs. “This is only going to get worse before it gets better.”

According to Denny’s suit, the retailer entered into an agreement on Sept. 16, 2019, in which the insurer agreed to make payments for business losses. Due to coronavirus, the retailer had to close and lay off its entire staff at its Boca Raton location. The lawsuit claims it was denied its business insurance claim by its insurer in April. It is seeking declaratory judgment, alleging the insurer breached its contract.

Ta-boo is making a similar allegation. The restaurant on Worth Avenue in Palm Beach claims it was previously open seven days a week from 11:30 a.m. through 11:00 p.m. and had the capacity to hold about 200 guests inside. The restaurant does not have any open air or outside capacity, according to the complaint. It shut down on March 20 and did not reopen until May 22. During that time, Ta-boo was forced to lay off about 50 employees, according to the suit. Ta-boo alleges its insurer denied its claim in June. The lawsuit alleges breach of contract and seeks declaratory judgment.

International Catastrophe Insurance Managers and Lloyd’s of London did not immediately return requests for comment.

Filings of business interruption lawsuits started shortly after coronavirus-related restrictions began in March. In April, IT! Italy Ristorante Café & Bar at 500 East Las Olas Boulevard in downtown Fort Lauderdale sued Chubb Limited, the largest commercial property insurer in the country, alleging it failed to honor its agreement to pay its business insurance claim tied to losses stemming from the pandemic.

In April, Atma Beauty, at 1874 West Avenue in Miami Beach, filed a lawsuit against HDI Global Specialty SE, Axis Specialty Europe SE and Underwriters at Lloyd’s of London. The complaint alleges Lloyd’s of London promised to cover losses and expenses incurred as a result of the salon suspending its operations, but failed to do so, breaching its contract. The salon paid a higher premium to be covered by an all-risk policy, and a pandemic was not excluded from the coverage, according to the suit.

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The protest movement that swept the globe in the wake of George Floyd’s death put corporate America under a microscope.

Like most of the business world, the real estate industry has long been controlled by white men, and the power of personal and professional networks has only reinforced racial disparities. For many minorities in the business, the lack of diversity has meant barriers to entry, barriers to ascension and routine workplace racism — both overt and subtle.

“Your pedigree is always questioned, and I have actually felt this way for my entire career,” said Tammy Jones, chief executive officer of Basis Investment Group, speaking in a panel discussion hosted by New York University’s Schack Institute of Real Estate in June.

Jones, who was interviewed by The Real Deal this month, said she was hopeful that the movement would lead to real change. Jim Simmons, of Asland Capital Partners, was also cautiously optimistic.

“I hope this is our Stonewall,” he said. “I hope this is our MeToo.”

In addition to igniting a national discourse, the protests have prompted some individuals to come forward with allegations of racism and microaggressions inside workplaces.

In June, whistleblowers contacted TRD about separate incidents inside two residential brokerages.

“I am finally reporting this because I feel we are all in a moment, where acts like this cannot be tolerated at any firm any longer, especially against minority groups,” said an anonymous sender who provided an email exchange between high-ranking executives at Core.

A second leaked email exchange, from Bushwick-based brokerage Nooklyn, showed Black broker Wileen Saint Louis calling out the company’s leaders for their response to the protests. “The silence of this company has spoken volumes to me and has been an utter disgrace,” she wrote. “Are we that invisible? Is this movement not worth a message?”

A string of agents responded to the email with their own complaints, including allegations of unequal treatment and lack of diversity at their firms and a failure from leaders to address complaints about discriminatory landlords.

In response to the accounts, Nooklyn CEO Moiz Malik said the company would “begin a review of landlord accounts that do not align with our values” and “establish a procedure for submitting housing discrimination-related complaints.” Asked about the other allegations of unequal treatment, Malik denied pay inequity at the company but acknowledged the need for change.

Other brokerage heads have also promised to lead cultural shifts inside their firms. In June, Corcoran Group’s Pam Liebman said in an email to agents that the leadership team would be taking a close look at the company and “redoubling our commitment to inclusion and justice.”

James Whelan, president of the Real Estate Board of New York, said the industry would come up with real solutions, “not just lip service.”

When TRD examined real estate’s diversity problem for a 2017 cover story, similar accusations against the industry emerged. But little changed. Developer Don Peebles, who last year launched a $500 million fund to invest in minority and female development firms, questioned the timing of the latest pledges.

“I think the industry is very late to the game,” he said in an interview this month. “It’s almost too little too late.”

Recently, some whistleblowers have taken their allegations to court.

In July, two Black former WeWork employees sued the company for racial discrimination and equal-pay violations. In one suit, the former head of diversity and inclusion, Christopher Clermont, said his image was often used in the company’s promotional materials, but in reality he was given “little in the way of responsibility.”

Clermont alleged that pay inequity and discrimination were so rampant at the company that Black employees and members had come up with the expression “WeWorking while Black.” A spokesperson for WeWork said the company had investigated the claims and “found them to be wholly without merit.”

And at a webinar in June hosted by Cushman & Wakefield broker Charlie Stephens, a racist comment was posted in the chat box about panelist David Moreno Jr., a Black attorney and co-founder of branding agency Mediabundance. “Yo moreno want chicken wings for dinner ??” the comment read.

“What really bothers me is to be a minority and have all these barriers we face as a community, and then there I was … trying to help everyone — and it was so hurtful and disheartening,” Moreno said in an interview.

The commenter appeared as “Juda Srour, CEO,” which is the name of the chief executive of flexible-office company Jay Suites. When contacted by TRD, Srour denied making the comment and said he had been impersonated.

While many companies and individuals in real estate have acknowledged the need for structural change, and some have taken a vocal stance against racism, the question remains: Will they put that sentiment into action?

In proptech, some firms have opted to focus their attention on reshaping their boards. This July, as it neared a presumptive IPO, flex-office startup Industrious announced it added Osei Van Horne, a managing director at Wells Fargo, as its first Black board member.

Compass’ Robert Reffkin has also spoken out about the need for greater diversity. In a recent television interview, he said 40 percent of Compass’ board is Black and 40 percent are women.

“We worked hard for that,” he added.

Reffkin praised Goldman Sachs for bringing more women onto its board, but urged the finance industry to offer the same support to minorities. “I would love to see one of the banks come out and take a stand around diversity of color, in addition to gender,” he said.

Executive recruiter Jana Rich, founder of San Francisco-based Rich Talent Group, said she had seen a sharp uptick in inquiries about diverse board candidates since June, as companies confronted their diversity problems and considered how to respond.

“I think to some degree, people are operating around the idea of doing the right thing,” she said. “Some of it is fear — the fear of looking bad. The real test will be in six months.”

Peebles noted that the issues the industry is now wrestling with are nothing new — and will not be going away.

“I’ve been telling our industry for years that the business model of exclusion is not sustainable,” he said.

“In order for it to survive and prosper again, it is going to need to be inclusive.”

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252 Bal Bay Drive and Patrick Dovigi (Credit: Wikipedia)

Billionaire Patrick Dovigi, a retired hockey player turned waste management mogul, sold his waterfront Bal Harbour mansion for $23.25 million.

Dovigi, founder, president and CEO of Green For Life Environmental, a Canadian waste management company, sold the eight-bedroom, 11,783-square-foot home at 252 Bal Bay Drive to 252 MKP LLC. The buyer’s entity is managed by Richard Kreisel-Kilstock, an attorney based in New York.

Oren Alexander of Douglas Elliman represented the buyer and seller. Alexander, who brokered previous sales of the Bal Harbour property, declined to comment on the buyer’s and seller’s identities. His father, Shlomy Alexander, built the mansion in 2016. It was designed by Chad Oppenheim.

The three-story home sits on a half-acre lot and features a 2,000-square-foot master suite, a rooftop deck with a Jacuzzi and bar, and an infinity edge glass pool, according to the listing.

Dovigi played minor league hockey in Canada in the late 1990s, and was drafted into the National Hockey League in Canada as a goalie for the Edmonton Oilers. He founded GFL Environmental in 2007.

Records show Dovigi acquired ownership of the Bal Bay Drive mansion through a conversion of the company that owned the property. He took over management of the entity in 2019. It was last listed for $27.5 million. At one point, the house was listed for $36 million, according to the property’s website.

Earlier this month, real estate developer and investor Harry Benitah and his wife sold a waterfront lot at 84 Bal Bay Drive for $6.4 million.

A year ago, a French buyer paid $24 million for a newly built mansion at 224 Bal Bay Drive, marking a record for single-family home sales in Bal Harbour.

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A survey by professional services firm Accenture found that about 61% of bank executives don’t expect to call all employees back to the office, and more than 40% of those surveyed are also planning to reduce their real estate footprints accordingly. (iStock)

While banks have begun the slow, careful process of returning employees to the office, most executives aren’t expecting everyone to come back.

A survey by professional services firm Accenture found that about 61 percent of bank executives don’t expect to call all employees back to the office. And more than 40 percent of those surveyed are also planning to reduce their real estate footprints accordingly.

Many firms are considering a model in which employees come into the office three days a week and work remotely the other two, as some aspects of the office environment are difficult to replace.

“One of the things the traders have said they miss is that informal dialogue and idea sharing that happens,” Accenture’s capital-markets practice head Laurie McGraw told Bloomberg.

“All of that is gone now. You talk with the people that are on your meeting schedule for the day for the most part. And the fluidity of idea exchange is missing in a lot of cases.”

Earlier this month, JPMorgan Chase had to pause plans to return workers to the office in Columbus, Ohio, as cases in the state jumped. Citigroup says it is unlikely to return even half of its workers to the office until a vaccine is available.

For office landlords, increased space requirements per employee may offset the decreased number of employees somewhat.

“They’re having to shut down every other desk, and the traders on the trading floor are all spread out,” McGraw said. “You almost need the same amount of space to bring half your staff back in a socially distant way.” [Bloomberg] — Kevin Sun

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Paris Theater, Mathieu Massa (Credit: Google Maps)

UPDATED,  July 21, 5:20 p.m.: Massa Investment Group bought the Paris Theater on Miami Beach’s Washington Avenue for $13 million.

Miami-based Massa Investment Group, led by Mathieu Massa, bought the 25,589-square-foot building at 550 Washington Avenue for $508 per square foot, records show. Big Time Productions, led by Eugene Rodriguez, sold the property.

The building sold at a sharp discount from its $23 million listing price in 2015. The Art Deco-style building was built in 1945. Under different owners, the property had been used as an adult movie house, a nightclub, and a photography and film studio, according to the Miami Herald.

It had a capacity to hold 1,200 patrons, and could be used for any type of event, including theatrical productions, launch parties and dances. A liquor store, Surf Liquors, sits next to the Paris Theater.

Massa Investment Group secured a $15.2 million loan from IberiaBank to acquire the property, records show.

Big Time Productions paid $975,000 for the building in 1992, records show.

Massa Investment Group specializes in private equity, real estate construction and hospitality, according to its website.

Massa’s plans for the site are unclear, and he was unavailable for comment.

Massa also owns Mr. Hospitality, which runs Baoli Miami, Marion in Brickell and El Tucan. He’s an heir to a family that founded a large tire company in Europe which eventually sold to Continental Tire of Germany in 2011, according to Massa Investment’s website.

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