P
enn-Florida Companies may lose control of its 101 Via Mizner apartment building in Boca Raton due to an alleged failure to pay off a $145 million loan at maturity. Blackstone Mortgage Trust has filed a Uniform Commercial Code foreclosure on the 14-story, 366-unit property and is seeking to hold an auction on January 15.

    The property is part of Penn-Florida's Via Mizner mixed-use development, which includes a golf club and hotel-condo buildings under construction after years-long delays. In UCC foreclosures, the auction targets the interest in the limited liability company that owns the property, not the physical building itself.

    Penn-Florida claims it was current on all debt obligations before the loan's recent maturity and is working to repay the loan through a refinance next month. The company completed the Via Mizner apartments in 2016 after initially taking out a $75 million loan from HSBC in 2014, which was later refinanced multiple times.

    The UCC foreclosure highlights South Florida's multifamily market struggles due to economic headwinds. After a boom in 2021 and 2022 fueled by an influx of out-of-state residents, the market has cooled down with new supply tempering demand and rents flatlining or dropping in some areas. Some landlords have resorted to offering concessions, such as one month's rent free at 101 Via Mizner.

    Multifamily landlords are also facing challenges from skyrocketing insurance premiums and higher interest rates, making refinancing costly for some and increasing demand for equity partners. Other signs of multifamily debt woes include Lynd considering a $9.1 million capital call due to higher insurance premiums and payroll, and Shidler Group selling the Riverland Apartments at a 22 percent discount from its purchase price in 2022.