Safe Harbor Equity is seeking foreclosure, foreclosure, foreclosure, foreclosure, foreclosure. The two hotels, located in Miami and Miami Beach, are owned by Henley Investments and involve a $13 million loan.
These properties include the 26-unit Pretty Swell Hotel at 321 Collins Avenue and the 33-room Life House Hotel at 528 Southwest Ninth Avenue in Little Havana, Miami. The Miami Beach Hotel was originally a hotel. Both are run by New York-based hospitality start-up Life House, which has a partnership with Henley.
Henry paid $15.4 million for the two hotels in 2018.
Records show Henley’s U.S. branch took out an $11.5 million loan from original lender MIOF Credit 1 in April 2018 to acquire the properties. The lender raised the mortgage to $13 million a year later, according to the foreclosure complaint. In June 2020, just after South Florida shut down due to the pandemic, lenders and borrowers agreed to move the due date to December 31, 2022, and again to March 31 of this year.
Safe Harbor, led by Ralph Serrano, bought the note in May after the Henley affiliate missed another deadline to pay off or refinance the loan, the complaint said.
Under the third loan modification, Henley agreed that it would owe the lender 24 percent interest if it defaulted, the complaint said.
A spokesman for Henry declined to comment. Safe Harbor did not immediately respond to a request for comment.
This isn’t Life House and Henley’s first foreclosed property. In September 2020, the Leste Group and its partner, Moto Capital Group, completed an out-of-court UCC foreclosure of an 81-room hotel at 350 Ocean Drive in Miami Beach. The mezzanine lender controlling the property, which was originally known as Lord Balfour, sold it last fall for $39.3 million, or $485,000 per key.
South Florida’s hotel market struggled at the start of the pandemic, with some hotels being foreclosed by lenders or sold at deep discounts. But when Florida quickly lifted its lockdown, the region’s hotel market began to recover, eventually leading some hotels to record average daily room rates and occupancy rates.
Earlier this month, real estate investment trust Service Properties Trust bought the Nautilus Hotel in Miami Beach at 1825 Collins Avenue for $164.5 million. The 250-room Art Deco resort is trading for nearly $700,000 per room.